DUBAI (WAM)

Global sea freight prices began the year 2024 with significant jumps, reaching record levels not seen since the end of November 2022.

This comes amidst a series of increases in prices during the last quarter of the previous year, ending the downward trend witnessed in 2023.

On a weekly basis, according to the Baltic Index for measuring sea freight prices, as of January 4, 2024, prices jumped by more than 85 per cent compared to their levels in the week ending December 29, 2023. The average cost of shipping a 40-foot container reached $2,490 compared to $1,341 the previous week.

According to the Drewry WCI composite index, the increase reached 61 per cent on January 4 compared to its level on December 21, 2023. The average cost of a 40-foot container rose to $2,670 compared to $1,661.

Before this weekly jump, despite the price increases observed during the last quarter of the previous year due to geopolitical events, price levels at the end of 2023 were lower than their levels at the end of 2022.

According to the Baltic Dry Index (BDI), global sea freight prices decreased by approximately 37.7 per cent over the past year. The cost of shipping a typical 40-foot container reached $1,341 in the week ending December 29, 2023, compared to $2,152 in the week ending December 30 of the previous year, 2022. This information is based on the BDI, which monitors shipping prices globally across major routes passing through the Pacific and Atlantic Oceans and through the Suez Canal.

Shipping prices reached their highest levels in the week ending January 13 during the year 2023, with costs reaching $2,238. The lowest level for prices during 2023 was in October, specifically in the week ending October 20 when the cost of shipping a container reached $1,048. Subsequently, there was a gradual increase until reaching the current levels.

The cost of shipping a typical 40-foot container was $1790.2 at the end of the first quarter of the previous year. It then dropped to $1277.2 at the end of the second quarter and decreased to $1176.4 at the end of the year's third quarter.

As per the Drewry WCI composite index, it surged by 61 per cent, reaching $2,670 for each 40-foot container in the current week compared to the previous week. It also increased by 25 per cent compared to the same week of the previous year.

The index indicates that the current price level of $2,670 for the typical 40-foot container is now 88 per cent higher than the average prices of 2019 (pre-COVID-19 pandemic), which were $1,420.