Shipping freight costs surge to 13-year high
September 13, 2021 - The shipping industry is posting its highest daily earnings since 2008 -- driven by surging demand for goods and raw materials -- with the bonanza centred around container shipping.
Since 1956, containers have revolutionised global trade by packing goods into standard-sized steel boxes -- TEUs or Twenty-foot Equivalent Units -- and hoisted by cranes onto ships, rail cars, and trucks.
An economic reopening has boosted global seaborne trade after the Covid pandemic. At the same time, the spread of coronavirus has played havoc, choking up ports and delaying vessels. The delays mean that more ships are needed to maintain scheduled sailings, and freight rates are soaring.
The ClarkSea Index, which shows the average earnings in $/day of all sectors of the maritime fleet, showed a robust $37,426/day on Friday (September 10), up from $13,200 a year ago -- a hike of 283 per cent.
The index takes account of revenues of bulk ships that carry industrial commodities, container ships, specialised refrigerated reefer vessels, and loss-making oil tankers.
In July 2020, global container shipping capacity stood at 23.8m TEUs. By this July, capacity had increased to 24.77 million TEU.
However, soaring costs and disruption at ports have affected economies around the globe, with food prices surging. Food prices were up 31 per cent in July from the same month last year, according to an index compiled by the United Nations’ Food and Agriculture Organization.