High freight rates put strain on global supply chains

Published Nov 12, 2024

Tridge summary

In the first half of 2024, global maritime freight costs surged due to shipping route disruptions and increased operating expenses, as reported by UNCTAD. The most significant factors contributing to these escalating costs include ship diversions, port congestion, and rising fuel prices. The Shanghai Containerized Freight Index (SCFI) experienced a peak before falling but still remained high compared to pre-pandemic levels. This surge has led to concerns about the sustainability of trade, economic growth, and development goals, especially affecting small island developing states (SIDS) and least developed countries (LDCs). The situation is further complicated by climate change risks and geopolitical tensions, highlighting the urgent need for action to stabilize freight transport markets and support vulnerable economies.

Disclaimer: The above summary was generated by Tridge's proprietary AI model for informational purposes.

Original content

Global maritime freight costs soared in the first half of 2024, driven by unprecedented disruptions to major shipping routes and rising operating costs, according to a report by UN Trade & Development, UNCTAD. Pressure on supply chains and economies is intensifying, with the most vulnerable small island developing states (SIDS) and least developed countries (LDCs) bearing the brunt. As freight rates rise, so do concerns about the sustainability of trade, economic growth and the global effort to achieve sustainable development goals. UNCTAD detailed that freight rates have soared in 2024 due to ship diversion, port congestion and rising operating costs. By mid-2024, the Shanghai Containerized Freight Index (SCFI) had more than doubled compared to the end of 2023. According to the latest available data, as of 18 October 2024, the SCFI was down 45% from its 2024 peak and 60% below its record level during COVID-19. However, UNCTAD notes, it remained 115% above its 2024 peak, but was ...

Source: MXfruit