Freight rates fall? Global supply chain shows signs of improvement

According to reports, factory closures , energy shortages and port capacity restrictions due to the epidemic in Asia have eased in recent weeks . Major US retailers also said they have imported most of what they need for the holidays . In addition, ocean freight rates have fallen from record highs .

Although these are all good news, economists and business executives said that strong consumer demand for goods, continued congestion at U.S. ports, a shortage of truck drivers and rising global freight rates will continue to affect economic recovery. In addition, more extreme weather and the risk of repeated outbreaks could clog the supply chain again.

The report said that the easing of supply chain bottlenecks will increase demand for goods while reducing logistics costs. If sustained, it will help ease the upward pressure on inflation. The number of ships waiting to unload at the Port of Los Angeles and the Port of Long Beach in the United States has increased, but it still hovers near record levels.

As of Nov. 19 , 71 container ships were anchored offshore, down from a peak of 86 three days earlier, with 17 expected to arrive in three days, according to the Southern California Marine Exchange . Shipping and retail executives said the backlog at U.S. ports is expected to end in early 2022 .

Data shows that trans-Pacific freight rates have fallen in recent weeks . The cost of shipping a container across the Pacific fell by more than a quarter in the week ending November 12, the biggest drop in two years. According to the Freightos Baltic Index, freight rates rose about 5% this week to about $14,700 per 40-foot container, but are still more than three times the level of the same period last year.

Louis Kuijs, head of Asia economics at Oxford Economics , said the worst of supply chain problems around the world is over. A survey of "country experts" covering 45 economies by the research institute found that almost all believed that supply chain disruptions had or would peak in the last quarter of this year.

Although it will take some time or longer for the supply problem to be completely resolved, we have finally heard some good news.

freight

Supply Chain

Improvement