Exorbitant freight rates are becoming a threat to the Mauritian economy. Shipping Costs To Increase Again by Mid-July.
Drewry, global shipping consultancy that predicted extreme freight rates in April states in its latest Container Forecaster Report that 2021 will be a historical year for container shipping in terms of profits. Drewry expects that the industry’s profits will amount to $100 billion.
This expected rise in profits is being driven by freight rate hikes ranging from 50% to 500% depending on ocean shipping routes.
Shanghai-Rotterdam and Shanghai Genoa has since the fourth quarter of 2020 and Rotterdam-Shanghai has since the first quarter of 2021 entered the “extreme” zone. A 440% increase as compared to the third quarter of 2020 has been noted.
According to Drewry’s forecast, container volumes are expected to increase throughout the third quarter peak season until the end of year by 10%. Worsening supply-chain disruption is expected to continue to drive prices up on a weekly basis until 2022 when industry leaders are expected to improve fleet capacity.
In Mauritius, experts in logistics in the import-export sector have observed price hikes of over 500% since April 2021.
Le Matinal has been informed that most shipping lines are increasing or considering increasing their rates as from July 15. Average rates are increasing by $500 for 20 feet containers and by $1000 for 40 feet containers.
Leading container shipping company, MSC’s rates are already over $5000 for 20 feet containers and over $10,000 per 40 feet containers.
According to local logistics experts, it is becoming increasingly difficult to find space on vessels as most are overbooked. Finding empty containers have become a daunting task.
In its Article IV Mission Staff Assessment Report, the International Monetary Fund advises the Mauritian Government to “focus on alleviating constraints linked to the pandemic, such as higher air and shipping costs rather than providing blanket support to firms”.
