Following years of record profits in the aftermath of the global pandemic, the container shipping industry has found itself in a precarious state.
A flood of new vessel orders – combined with plummeting cargo volumes – have extended a drop-off in global shipping rates, which on average have plunged more than 80% since their peak in late 2021.
Transatlantic container shipping rates, while trending downward, remain in a state of flux – and can vary widely depending on market conditions, fuel prices, global economic trends and more. It’s important for shippers to understand these factors to secure cost-effective transportation both today and in the long term.
Shipping rates for transatlantic containers have fluctuated wildly over the past few years. In 2020, the initial spread of COVID-19 stunted demand for shipping services – resulting in lower shipping rates for many routes, including those across the Atlantic.
A few key factors continue to affect these rates:
It's difficult to predict with certainty where global shipping rates are headed in the long term, but there are some indications that cost pressures are easing up for transatlantic voyages.
Containerships on order will add a whopping 7.48 million 20-foot equivalent units (TEUs) in the next two years – an overall capacity increase of nearly 30%. The bulging orderbook is a reflection of optimism by ocean carriers that scrambled to meet soaring demand for space during the height of the pandemic.
Now, as they cope with slackening demand for ship space, carriers could be setting the stage for a further plunge in rates. (Transatlantic container shipping rates are roughly 37% lower than a year ago, but remain more than double the cost in 2019.) Overall, the balance of power is shifting back to shippers.
It's worth noting that shipping rates can be highly volatile and subject to sudden shifts in response to changing market conditions and supply chain disruptions. Ultimately, vigilance on these trends is key.
No matter which direction rates are trending, cost-effective container transport requires a strategic, proactive approach. Many shippers still face significantly higher costs for transatlantic services than they did in previous years, prompting some to explore alternative shipping methods or to adjust their supply chain strategies to mitigate the impact.
Here are a few ways to keep costs under control:
By exploring these options and working with logistics providers and carriers, shippers can optimize their supply chain and reduce transatlantic container shipping costs without sacrificing quality or service.
Experienced providers, like I.C.E. Transport, will understand the latest market conditions for transatlantic container shipments and help shippers avoid unnecessary costs.
If you want to make sure you’re getting the best combination of rates and service for your transatlantic lanes, feel free to contact the shipping experts at I.C.E. Transport for answers.