With 2015 officially over, some of our clients are already wondering what to expect in 2016 when it comes to freight rates. There are several factors that lend themselves to a decrease in freight costs which can help shippers to increase their bottom lines. First, the worldwide fleet of containerships that are idle and not sailing as frequently as they could be is at an all time high. Carriers are finally taking action when it comes to rates to address the global circumstances. Between now and the summer peak season, ocean freight rates may decrease. In addition, carriers are taking time to alter their sailing schedules to make better use of their assets.
Additionally, Western sanctions coupled with the drop in oil prices have caused Russia's currency to depreciate and send the Russian economy towards a recession. As a result, shipments from Asia dropped by more than a quarter and the weakened euro affected European imports similarly. Next on the list are recently built "mega-ships" which have meant excess capacity recently. A great snapshot of the current capacity situation can be summarized in one sentence: Over the past 7 years, demand for container freight increased by 36% collectively, but the container fleet rose over 80%.
