26 Oct Freight Rates to Decline With Lower Vessel Utilisation
According to ocean shipping analyst Sea-Intelligence, freight rates are due for a decline in response to reduced vessel utilisation rates, which have been on a downward trend since their spike in the peak season of 2020.
Vessel utilisation rates correspond to spot rates. Once utilisation rates fall within the 90-95% range, it effectively means all capacity is fully utilised and spot rates increase dramatically.
However currently the market has experienced two consecutive months of sub 90% utilisation, indicating that the market is no longer at a point which can sustain the extremely high spot rates. This applies to the trans-Pacific, Asia-Europe and trans-Atlantic oceanic space. As a consequence, spot rates should continue to decline.
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Rachael Budd & The Transolve Global Team
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