THE agricultural sector can expect to contend with elevated ocean container shipping costs and ongoing supply disruptions for at least another year, according to the latest research from Rabobank.
In its Global Ocean Freight Outlook report, it revealed global container freight prices were set to continue to gradually decline over the coming 12 months.
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But they are not expected to return to pre-pandemic lows, with the global container shipping industry now impacted by broader structural factors, including a weaker global economy, higher operational costs, geopolitical uncertainty and imbalanced trade flows.
The report says even though the record-breaking high ocean freight rates seen in the past two years, driven by pandemic-related disruptions, have already begun to soften, they remain three to five times above pre-2020 levels.
Long-term contract rates have also risen significantly and remain elevated.
The reliability of ocean container freight schedules had dropped from almost 80 per cent pre-pandemic to approximately 30 per cent as disruptions and uncertainties continued across the globe.
RaboResearch global supply chain analyst Viet Nguyen said while shipping container prices were "never" expected to return to the low pre-pandemic rates of approximately USD 3000 a container, they would decline from the current USD 7000-8000 per container mark in the year ahead.
He said several global "macro drivers" were influencing shipping dynamics and behind the lingering high costs.
While heightened inflation and all-time low global consumer confidence levels were exerting downward pressure on ocean rates, Mr Nguyen said rates were being supported at higher levels.
He said it was through imbalanced global trade flows which hinder a cost-effective repositioning of empty containers.
"Added to this, geographical uncertainties are adding risks and there are also growing operational costs for the sector from higher energy costs and sustainability regulations."
Rabobank expects schedule reliability for containers to also recover, albeit slowly.
Congestion is forecast to remain at key ports until the first half of next year.
