Published on :
The horizon has cleared in the maritime freight sector. Falling fuel prices and lower demand have driven transport prices down from highs in late 2021.
The fall of the Baltic Dry Index illustrates how much the context has evolved on the seas of the globe. It has fallen from 5,500 points in the fall of 2021 to less than 750 today. The BDI is an indicator of freight rates calculated on around twenty maritime routes, for the dry bulk transport of materials such as coal, iron ore, or even cereals.
Reflection of falling demand
Its drop testifies above all to a declining demand, and therefore to an economy which is idling. Coal purchases, for example, have been significantly reduced since stocks have returned to comfortable levels in consuming countries. Same thing for iron ore. The construction sector has not taken off again, particularly in China. As for the transport of cereals, it was directly affected by the war in Ukraine which led to a drastic drop in maritime traffic.
With less demand, the level of port congestion has returned to pre-Covid levels. It is the return to a certain fluidity with generally much shorter waiting times, which also contributes to lowering the rates of maritime freight. Another factor which participates, even if only marginally, in the relaxation of prices, the arrival of new bulk carriers on the water which increases transport capacities.
Container prices are also on a downward slope. The Freightos Baltic Index, calculated on a dozen global routes, is more than telling: while it was worth $11,000, on average, at the end of 2021 for a 40-foot box, it is approaching $2,200 these days. .
► To read also: Maritime transport overheated since the economic recovery
A year 2023 still suspended in China
This drop in maritime freight costs, fueled by persistent fears of a recession, has helped to drive down the prices of many raw materials. It also revives competition. In Europe, some producers fear that they will no longer be competitive with the arrival of cheap Chinese raw materials, such as paper.
The recovery of Chinese activity will be the factor that will affect freight rates in 2023, recalls Marc Pauchet, analyst at Maersk Broker, who anticipates a rise in freight rates in the second half.
► Also to listen: Sea freight: containers are snapped up at gold prices