Ocean freight rates heat up a little in December

BAROMETER. The month of December has brought an end to a year which turned out more favourably than expected for container shipping operators. It brought handsome bonuses for the shipping companies and the big forwarders, even though their financial performance was more the result of geopolitical tensions than of the sector's intrinsic performance.

Three factors pushed up freight rates during the month of December:

• The decision of the shipping companies to deliberately limit capacity during the run-up to the Chinese New Year.
• A rush to get cargo loaded before the increase in customs duties announced by the future new administration in the United States.
• Uncertainty about the possibility of strike action at US east coast and Gulf of Mexico ports from 15 January on. Negotiations on a new six-year master agreement between the International Longshoremen’s Association (ILA) and the cargo-handling industry body, USMX, were deadlocked over the question of terminal automation. A tentative agreement was finally reached on 8 January.

It should be noted that two of these three factors are strongly influenced by the prospect of the arrival in power of the new Trump administration. In the port dispute, the president-elect has come out strongly in favour of the ILA.

The battle between supply and demand

The increase in freight rates on Asia-Europe and transpacific routes at the end of the...