Waiting for the Chinese New Year.. Hope the demand for transportation services will grow

December 25,
Demand for sea freight services is expected to grow well ahead of the Chinese New Year (Photo: Getty)

The maritime freight trade lives in a difficult and complex reality, and it finds itself forced to provide its services in exchange for declining prices, which threatens the ability of this sector to withstand the escalating operating costs.
And when the first spark of Corona erupted, that is, three years ago, the costs of sea freight prices rose rapidly.
And when the world decided to stand up to the pandemic and open its economic sectors wide, the fees collected by the freight sector began to decline vertically, for the fortieth week in a row.
The global container index issued by Drewry Company illustrates the bitter reality experienced by major shipping companies, which the Corona pandemic enabled them to reap profits amounting to $ 180 billion last year.
But the indicator shows at the present time that today is not the same as yesterday, as the cost of shipping forty-foot containers carried on the deck of a ship departing from Shanghai to Rotterdam fell within a year from 14 thousand dollars to 2600, which can be measured on freight operations from the same Chinese city to New York.

price correction

In fact, the money that flowed into the coffers of those companies in the first two years of the pandemic motivated them to invest heavily in building new ships and containers.
Today, however, it finds itself paying the price of those policies, because slowing global demand has slowed the volumes traders import.
In this context, economist Nihad Ismail says: This process currently underway is a correction to freight rates, given that the Corona pandemic has led to an increase in prices many times what they were in 2019 and before that.
In an interview with Al-Araby from London, he explained that “the Corona epidemic receded and was controlled, despite the emergence of pockets of it, especially in China, and the return of global trade to its normal course, then addressing the bottlenecks in the supply and supply chains, and removing the obstacles that led to the congestion of ships and the significant increase in prices.”
Ismail asserts that prices will continue to decline, and sea transport activity in 2023 will decrease, he said.
Source: Al Arabi