Looking Back at the Most Recent Quarter in Shipping
Recently, Drewry Maritime Research, a leading research firm watched closely by carriers and freight forwarders, released their report from the 2nd quarter of 2014. It is important to look at their report, whenever they release it, because it provides a factual snapshot of the international freight shipping industry and expert projections for the future.
In the report, Drewry Maritime Research projected a 2.5% fall in ocean freight shipping rates later this year. The big reason that this drop in shipping rates is expected is because of the high volatility in the industry right now. The market is changing rapidly, and because of it, the rates for container shipping might decline.
This was not the only aspect of the report from Drewry Maritime Research. They also found that spot rates are currently higher than contract rates. However, this trend might not last into the next quarter, especially since we are entering peak season. The good news overall in the industry is that the problem of overcapacity has leveled out a bit, although the implementation of the P3 Alliance would have helped before it was abandoned. The biggest challenge for carriers is to cut their rising expenses. This is going to be tough to cut with the volatility in the market. If carriers can eliminate expenses, the shippers generally receive a great deal. But that is a big if, and there are no guarantees if that will even continue. The best way to get a deal is to work with a trusted logistics provider.