In 2021, as COVID-19 disrupted global supply chains, the shipping world experienced a bonanza: freight rates soared, empty containers in Shanghai could command astonishing prices, and carriers placed massive orders for new vessels. Senior executives confidently predicted that freight rates would “normalise … above historical” levels. But in the years since, that confidence has been shaken – and today, the industry is facing yet another inflection point.

This is more than just another story of boom and bust. For importers and exporters, particularly in the UK and Europe, understanding these cycles, and having the right logistics partner, has become essential.

 

The Build-Up: Pandemic, Over-Order, and the Big Gamble

  • COVID-era spike: In 2021, container freight demand surged as economies scrambled to move goods. This led to extraordinary spot rates – empty containers could be hugely profitable to reposition. 
  • Over-investment: Carriers didn’t just ride the wave – they doubled down. Globally, hundreds of new container ships were ordered, totalling tens of billions in investment, betting that high rates were not temporary. 
  • Hubris of normalisation: Many in the C-suite believed that this “new normal” of elevated freight rates was here to stay. 

The Crash: Reality Hits

  • Rate collapse: As demand cooled, freight rates tumbled. According to UNCTAD, spot rates fell dramatically after their 2021 highs.  
  • Supply glut: With so many new vessels coming online, the market risked being flooded with capacity just as demand was weakening. 

Case Study: The Red Sea Crisis & Its Unexpected Boon to Carriers

Rather than focusing solely on the COVID build-up, let’s pivot to a more recent and strategically important event: the Red Sea disruption that began in late 2023.

  • Houthi attacks and rerouting: The escalation of Houthi attacks forced many container vessels to avoid the Red Sea and Suez Canal, rerouting instead around the Cape of Good Hope – significantly increasing journey times. 
  • Capacity effectively squeezed: J.P. Morgan estimates this diversion led to an “approximately 9 per cent reduction in effective global container shipping capacity,” as ships were at sea longer.  
  • Insurance & cost shock: War-risk insurance premiums spiked, and longer routes added fuel and operational costs.  
  • Freight rate surge & profits: With effective capacity constrained, rates soared again, driving record profits for container lines. 
  • Macro inflation effects: These shipping cost shocks feed into inflation. Higher transport costs are passed on to goods prices. 

What It Means for UK & International Importers/Exporters

This isn’t just an “industry issue.” For shippers, especially in the UK, these cycles have very real consequences:

  1. Cost volatility 
    • Freight is no longer a simple input cost; it’s volatile, cyclical, and unpredictable. 
    • During periods of disruption (like the Red Sea crisis), landed costs can surge, squeezing margins, particularly for SMEs. 
  2. Planning challenges 
    • Longer transit times disrupt just-in-time inventory models. 
    • Cash flow: securing containers or capacity early can require greater capital outlay or working capital. 
  3. Inflation risk 
    • Container shipping spikes contribute (modestly but meaningfully) to inflation on imported manufactured goods. 
    • Higher transport costs are often passed on to end consumers or reduce profitability. 
  4. Strategic exposure 
    • Geopolitical risk: disruptions remind shippers that “just-in-time” supply chains can be brittle. 
    • Overcapacity risk: if the market corrects strongly, freight rates could collapse again, forcing carriers to idle ships, slow-steam, or scrap vessels.  

How Hawley Logistics Helps Navigate These Volatility Waters

At Hawley Logistics, we don’t just move containers – we help clients future-proof and de-risk their supply chains:

  1. Strategic route planning 
    • We assess geopolitical risk and recommend optimal shipping lanes (whether through Suez, rerouting, or via alternative hubs). 
    • Scenario modelling helps you understand cost and time trade-offs. 
  2. Rate hedging and negotiation 
    • We negotiate long-term contracts where advantageous, locking in rates for clients. 
    • Blended rate strategies balance risk and flexibility. 
  3. Inventory & cash flow advice 
    • We work on inventory strategies (pre-positioning, safety stock) to mitigate delays. 
    • We advise on financing implications of locking in capacity early. 
  4. Risk monitoring & intelligence 
    • Our team tracks geopolitical flashpoints, insurance costs, and freight trends. 
    • Real-time advice allows you to adapt quickly to emerging crises. 
  5. Sustainability & cost control 
    • We guide clients through greener shipping options (dual-fuel, slow steaming). 
    • Data-driven forecasting helps optimise capacity and minimise exposure to rate spikes. 

The New Cycle Is Here – Are You Ready?

If the 2021–2022 period felt like a gold rush, today’s shipping market is the second chapter – where the rules have shifted, disruptions are more geopolitical than demand-driven, and stakes are higher.

For UK and international exporters and importers, this era demands more than reacting to freight rates. It calls for strategic logistics partners who can think ahead, monitor risk, and build resilient supply chains.

At Hawley Logistics, that’s exactly what we do. Whether facing soaring costs, longer transit times, or geopolitical uncertainty, we help you navigate – not just survive, but thrive.