Ocean Freight skyrockets in 2021
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Ocean Freight skyrockets in 2021

Ocean Freight
The rising transportation cost of the goods is disturbing the importers and businesses all over the world. As predicted by Trojan’s experts the ocean freight is going to increase or stay in this position for a certain time period. The freight rates have been tripled and quadrupled almost on all the trade routes. According to the Freightos Baltic Index (FBX) the prices of container vessels have increased fourfold in comparison to the last years. However, there is a little sign of shipping costs coming down but it is for a short period,also the freight will continue to increase until the fourth quarter of this year as this is the peak season, and this time is the busiest term of shipping. As peak seasons start from mid of August to mid of October and again by the Lunar New Year or Christmas as some Asian countries have festivals and global demand increases overall. The demand can create scarcity in the containers and the shipments will be delayed and the cost will be increased. In the current times shipping lines are minting money. Shipping companies like Maersk and Evergreen have recorded the highest amount of revenues in the past months.

Freight soaring dramatically

The year 2021 has been tough for both the importers and the exporters because almost 80% of the goods are transported through the ocean. The increase is seen in the rates after the outbreak of Covid-19. After that, another peak will be seen in the holiday shopping season. The trade has beenimbalanced as some countries are in lockdown and the production has also been affected, this has created imbalances between the supply and the demand. Also on the other hand shipping lines have decreased the capacity on some routes. Port delays and closures causes the shortage of containers as it is stuck there and later it is returned empty. The competition in the freight capacity have also been intense, which has gradually pushed the freight to rise than the last year. Tyre is an initial part of the vehicle and the demand will stay stable. Our experts suggest the best way to survive this freight wave is to continue importing.

Solution to the soaring Freight

In response to the container shortage at ports, the Hoa Phat Group has planned to set up their first container factory in the southern region. They are expected to manufacture 500,000 TEU containers yearly. They are mostly focusing on the length of 20-40 feet. Their containers will be launched in the second quarter of 2022.