Construction + Economy, Lighting Industry

Freight Rates Expected To Drop In 2023

Sea, air, and trucking models all predict dropping freight volumes in 2023, which would lead to lower shipping costs and could make some goods more affordable. This is according to a trio of forecasts released last month.

Those three forecasts found a “severe rate of contraction” in transportation prices measured in November, according to the Logistics Managers’ Index (LMI). If that trend continues as forecast, it would follow months of tight capacity and high rates in many transportation modes.

On the water, ocean freight carriers set exceptionally high container rates during 2022. But towards the latter half of the year, those prices started to plummet, and they will likely continue to drop into 2023, according to a market forecast from Container xChange, a German container logistics platform.

The drop is in response to a significant oversupply of containers, with a further influx expected in 2023, prompting shipping lines to reduce vessel capacity and suspend services by “blank sailings,” an industry term for canceled trips. In 2023, there is a high possibility of an all-out price war. Experts predict ample capacity both on the vessel as well as on the container side.

A similar scenario is playing out on airport runways, where general airfreight volumes dipped for a ninth consecutive month.

Additional information is available here.

 

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