The global economy is struggling with rising inflation and falling demand for imports and exports. As Europe takes measures to combat rising energy costs and its dependence on Russia for energy, the United States awaits the impact of reduced consumer spending, inflation, and interest rate hikes. Experts from international transport and logistics company AsstrA-Associated Traffic AG comment on what how today’s macroeconomic situation is affecting the market for sea transport between the USA and Europe.
“There are a number of issues impacting freight costs and shipping times. Seasonality, a drop in supply of goods to export, and lower consumer demand due to inflation are causing maritime transport prices to fall. Even so, rates remain extremely elevated compared to what they were pre-pandemic,” says Botond Kovacs-Mate, Branch Manager AsstrA Hungary.
Climbing oil prices translate directly to higher diesel prices. U.S. diesel prices are up significantly from last year and are likely to go higher. These costs could be passed down to shippers, making international shipping even more expensive. Despite the increased rates, capacity to and from U.S and Europe is gradually returning and there is still great demand.
“Advance bookings of up to six weeks are still required for shipping from the United States. While vessel availability in major ports has improved, the shortage of containers remains an issue. While the demand for sea transport remains constant, there has been a change in export volumes, which may help ease congestion at port terminals,” adds Janusz Bulinski, Head of Sea Freight at AsstrA in Gdańsk.
“Congestion is an issue for all major ports around the world. The infrastructure – in which there has been little to no investment for the last several years – is overloaded. Urban growth has taken place around ports and there is no room to expand storage yards or railway terminals. The situation cannot be expected to improve quickly,” highlights Anna Smirnova, Head of AsstrA IPL UK. “The recent port strikes in Liverpool did not make a significant difference, as the already difficult situation could not get much worse. Nevertheless, a backlog of services is still expected at UK ports and some Northern European ports such as Rotterdam and Antwerp. For comparison, the average time spent by ships in the ports of Hamburg and Bremerhaven is now nine days, a significant increase compared to previous years,” concludes Anna Smirnova.
Author: Aneta Kowalczyk.