With freight costs rising due to supply chain volatility, managing freight spend is a key concern for shippers and forwarders, according to a Xeneta poll. In the company’s mid-year update, CEO Patrik Berglund described the volatility in 2024, pointing out an initial spike in spot rates on key Far East trades at the beginning of the year, followed by a dip before a renewed escalation in May. Berglund noted that the market was able to move in both directions even as it faced restrictions caused by the Red Sea crisis.

Elevated spot rates are also leading to an increase in contract rates. Xeneta said 74% of its customers have faced premium surcharges since the Red Sea crisis began. At a recent online event, Maersk’s CEO, Vincent Clerc, explained to customers that freight rates are higher because of increased charter costs and longer cargo journeys. He said the higher rates are temporary and would “go back to market” as some challenges are alleviated.

According to Lars Jensen, CEO of Vespucci Maritime, , over 200 days have passed since the vessel diversions around South Africa. He highlighted uncertainty over the duration and cautioned that it might take years to return to normal sailing routes

Source: The Loadstar