Are container freight rates really 'crazy'?

THERE has been a huge amount of hand wringing as container freight rates have soared. According to the latest Long-Term XSI Public Indices from Xeneta, which crowd sources real-time rates data from leading shippers, July saw the long-term contracted rates surge by their largest ever monthly increase, climbing by close to one third.

"This is a truly breathtaking development," commented Patrik Berglund, CEO of Oslo-based Xeneta. "We've seen a combination of high demand, undercapacity and supply chain disruption (in part due to Covid-19 and port congestion) driving rates ever higher this year, but nobody could have anticipated a hike of this magnitude. The industry is in overdrive."

He added: "Reports suggest that more than 300 vessels have already been ordered this year to try and redress the balance. However, these obviously won't come on line for some time, so it's difficult to see - unless something radical transpires - any relief on the immediate horizon for the shipper community. Quite frankly, I've never seen anything like it."