New York April 28 2022: US-based logistics provider C.H. Robinson expects global ocean freight rates for container ships to remain elevated through 2022 as the holiday peak season begins, the company said during its first quarter earnings call April 27.
The company indicated that, while volumes had waned amid hampered production capacity in China, there was a strong likelihood for an increase in booking activity as Chinese production facilities come online, which would serve to keep freight rates elevated.
"Covid lockdowns in China have reduced [production]," C.H Robinson CEO Robert Biesterfeld said April 27. "We expect some pent-up demand when China fully reopens."
Reduced exports in China have caused shipowners to divert vessels to alternative gateways or wait outside ports for a chance at berthing. C.H. Robinson reported 506 vessels at waiting for berth outside Chinese ports on April 19, up 90% from February numbers.
"When exports resume to the US, congestion is likely to increase," Biesterfeld said. "While ocean rates may taper a little, we expect them to remain elevated."
Total revenues for the company's global freight forwarding division surged 90% to $2.2 billion during Q1, spurred on by higher pricing and volume in both the air and ocean services, the company said in a statement.
While the pricing environment has remained elevated, global freight rates have come off in recent months, beginning in earnest when the pre-Lunar New Year import rush subsided in January.
S&P Global Commodity Insights' Platts Container Rate Index – a weighted average of key Platts container assessments – was assessed at $5,920.83/FEU April 27, down 19% from early January, and down more than 34% from the year-ago date.