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SINGAPORE: World port congestion is about to proceed till at the very least early 2023 and preserve spot freight charges elevated, logistics executives mentioned on Wednesday, urging charterers to change to long-term contracts to handle transport prices.
The COVID-19 outbreak has lengthened ship supply instances since 2020, pushing up freight prices, whereas the Russia-Ukraine battle and lockdowns in Shanghai have added to provide chain disruptions this yr.
“We imagine the present congestions, not solely the ports but additionally the landside infrastructure, shall be there at the very least until Q1 2023,” mentioned Peter Sundara, head of world ocean freight product for the worldwide logistics division at Visy Industries.
Whereas extra vessels may very well be added to the worldwide fleet subsequent yr, this doesn’t imply that freight charges will drop broadly because it relies on how ship carriers allocate elevated vessel capacities, he informed the S&P World Platts Bunker and Transport Summit.
Eric Jin, head of funding assist at industrial gear provider BMT Asia Pacific, mentioned rising transport prices, longer transit instances and better uncertainty would be the “new regular” for the transport trade.
Spot chartering charges have held agency to this point this yr, with provide chain disruptions and port congestion affecting ships globally, notably in the US and China. The executives really helpful charterers signal longer-term contracts with shipowners to beat problems with unstable value and availability.
It is “now not a case of going for 3 months or six months, one month, not even one yr, however two to 3 years … as a result of we wish certainty in value and certainty in area,” mentioned Sundara. BMT’s Jin mentioned greater than 60% or 65% of shippers have been remaining on spot charges.
“This implies they don’t seem to be taking measures to take care of the brand new state of affairs, this implies they’re vulnerable to full provide chain dangers,” he added.
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