Shipping rates are falling!

We have good news for importers: shipping rates are falling! Inventory surpluses, global port congestion, inflation, and reduced demand for cargo services from east to west cause a decline in freight rates. How much does shipping cost?

Shipping rates are falling!

Depending on the destination, international shipping is possible by air, sea, rail, and road transport solutions. Each method has its advantages and disadvantages and has different transit times and freight rates.

Modes of transport: cost and transit time

In 2021, 40 ‘HC container freight rates ranged from USD 8,000 to over USD 18,000. From January 2022, the rates have a downward trend (apart from a slight increase in July). Depending on the route, rates have dropped by 40-75% since the beginning of the year. Current freight rates are at or below their 2021 lowest level observed in April. The drop in transport rates makes customers renegotiate long-term contracts with carriers.

The graph below compares 2021 and 2022 ocean freight rates.

Ocean freight rates 40' HC

Shipping rates 2022

Let us take a look at the current ocean, rail, and air freight rates (September 2022):

LCL Rail freight

  • Xiamen-Hamburg: 2.38 CBM – 700 USD
  • Ningbo-Pruszków: 780 kg/13.14 CBM – 3000 USD

FCL Rail Freight

  • 40’HC Jing’an-Gdańsk: 8500 USD
  • 40’HC Guangzhou-Duisburg: 8800 USD

LCL Ocean Freight

  • Gdańsk-Nowy York: 1.92 CBM – 1000-1100 USD
  • Shenzhen-Gdańsk: 12 CBM – 3900 USD
  • Gdańsk-Brisbane: 8.64 CBM – 3000 USD

FCL Ocean Freight

  • 40’HC Tianjin-Gdańsk: 8700 USD
  • 40’HC Xiamen-Hamburg: 7000-8000 USD
  • 40’HC Gdańsk-Felixtowe: 4000 USD

Air Freight

  • Toronto-Frankfurt: 0.1 CBM – 500/600 USD
  • Yiwu-Gdańsk: 200 kg – 6000 USD
  • Manchester-Warszawa: 1.2 CBM – 700 USD

Looking at the examples, it is clear that rail freight is less expensive than ocean freight. Air freight is the most expensive transport solution of all.

Will ocean freight rates decline in 2023?

At the end of 2022, we can expect a slight increase in freight rates in November and December, but it will not be as significant as the previous year. In addition, it is expected that sea transport rates will experience a downcycle in 2023 and even in 2024. Moreover, we can expect an increased capacity of the maritime transport fleet by approx. 9% (new ships will be launched). However, the freight rates will not be as low as before the pandemic due to more expensive fuel and investments in low-emission solutions and other environmentally friendly technologies implemented by shipowners.