High freight rates inflate prices
Copenhagen-based maritime consultancy Sea-Intelligence recently analysed the impact of the elevated freight rates on importers for a variety of consumer goods, especially on the Asia to US West Coast and North Europe trade lanes.
An OECD-data-based value of consumer goods held within a FFE was thus compared to an average of four spot rate indices (XSI, SCFI, FBX, and WCI) for spot rates, including the carriers’ recent surcharges.
According to data presented in a public webinar by Flexport, these amount now to USD 1,000-2,000 for Asia-Northern Europe and USD 2,000-5,000 for Asia-United States West Coast, which implies a de-facto spot rate of approximately USD/FEE 11,300-12,300 on Asia-Northern Europe and of USD/FEE 7,000-10,000 on Asia-United States West Coast.
Taking into account that these categories of commodities are not exhaustive and that large cargo owners will have secured contracts with freight rates below the indicated spot rates, the message is clear.
Alan Murphy, CEO of Sea-Intelligence, concludes: "We are now at a point where an increasing range of cargo owners quite simply will not be able to sustain their business, at the currently high freight rates." (cd)