Freight rates are not likely to ease this year, according to market experts and industry insiders. In an interview with Reuters, the German logistics company, DHL said that rates for sea freight, road freight and air freight are expected to stay high throughout 2022 due to the ongoing disruption, a prediction backed by others in the industry.
Why have freight rates risen?
A number of factors have caused the elevated freight rates seen throughout 2021 but by far, the biggest influence on freight rates has been the Covid-19 pandemic, which has disrupted supply chains on a global scale and continues to do so in 2022.
As a result of the Covid-19 pandemic, there has been drastically reduced availability of many raw materials and parts, which, has, in turn, slowed manufacturing and created a shortage of many consumer goods.
The pandemic has also resulted in labour shortages due to widespread lockdowns, isolation rules and infections. This has led to increased shipping waiting times and caused heavy shipment delays across the board.
A shortage of both air freight and sea freight capacity has extended waiting times further. The increased demand and reduced availability has ultimately led to increased shipping costs for both air and sea freight.
Predictions for freight rates during 2022
Freight Transport Research Transportation Intelligence (FTR) have echoed DHL’s prediction of rates remaining high, suggesting there will be no change throughout the first or second quarter of the year.
Meanwhile, DHL’s competitor, FedEx, warned of continued shipment delays as a result of rising Covid-19 cases, in particular, due to the rapid spread of the Omicron variant, with the company battling ongoing staff shortages as a result of both coronavirus and severe weather.
Speaking to Reuters, Tim Scharwath, head of DHL, said they were currently advising their customers to agree to longer-term contracts, ideally for two to three years to safeguard against prices for the future. He also suggested that in the immediate short term, air freight rates, in particular, may rise even further due to the diminished capacity for air freight cargo as a result of fewer flights.
Looking for freight solutions?
At Hawley Logistics, we have over 35 years of experience in freight solutions. We offer a wide variety of freight services to suit your specific needs, from sea freight to air freight and road freight.
We have extensive and robust global partnerships that allow us to seamlessly move your goods from A to B efficiently and cost-effectively, using our longstanding worldwide relationships and multiple global trade networks.
We understand that these are challenging times for many businesses and that situations are constantly changing, however, we pride ourselves on remaining ahead of the curve to ensure we can offer the very best service to our customers. We’re constantly evolving and expanding and staying up-to-date with industry changes so that we can keep you informed and keep your goods moving!
To discuss your logistics requirements or find out more about any of our freight or haulage services, get in touch today, or if you prefer you can request a callback and a member of our team will be in touch within a few hours to answer your query and find out how we can help.
