Large-scale shippers fear soaring sea freight rates

Europe’s large-scale shippers are preparing to face a significant increase in sea freight rates. Due to the IMO 2020 regulations (Low Sulphur) logistics managers of international companies expect costs to rise by between 5 and 10 percent next year. This is what Oliver Kahrs, Managing Director of Tim Consult GmbH, said in a lecture at the “VNL Powerday Transportmanagement” in Linz.
 
Some shipping companies, such as HMM, are well on the way to switching to scrubber technology. Others are still in their infancy in this respect, the head of Tim Consult reported. He expects an increase in sea freight rates of USD 60 to 100 per TEU. Some logistics managers will have to coordinate this with their management board, he adds.
 
Oliver Kahrs sees the limited reliability of the liner shipping companies as a further challenge in sea freight. According to the survey by Tim Consult, in 2019 one in four container ships reached its port of destination late.
 
The results are based on surveys with large shippers with a combined annual volume of around 7 million TEU, with an average volume of 125,000 TEU per company. According to their figures, sea freight rates rose by 6.7 per cent in 2019 and recently formed overcapacities on the North Atlantic trade lane.
 
The logistics industry was poorly digitised, which explains the success of the digital forwarding companies, said Oliver Kahrs. Of course the latter lack the network of group forwarding as an instrument of local customer service worldwide. He also assumes that “the large forwarding companies will follow suit in this area”.
 
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