Ocean shipping rates are expected to stay elevated well into 2022, setting up another year of incredible profits for global cargo carriers, with smaller companies and their customers to foot the bill.
The spot rate for a 40-foot container to the U.S. from Asia topped $20,000 last year, including surcharges and premiums, up from less than $2,000 a few years ago, and was recently hovering near $14,000. What's more, tight container capacity and port congestion mean that longer-term rates set in contracts between carriers and shippers are running an estimated 200% higher than a year ago, signaling elevated prices for the foreseeable future.
While large customers of sea-borne cargo have the ability to negotiate better terms in those deals, or absorb the added expense, smaller importers and exporters -especially those in poor countries- can't easily pass those costs along or cover long periods of stretched cash flows. Therefore, this situation is casting a light on the market concentration of shipping lines, and their legal immunity from antitrust laws.
Denmark's A.P. Moller-Maersk A/S, the world’s second-largest container carrier, was on track for an annual profit last year that would match or surpass its combined results from the past nine years.