The increasing volatility in freight rates caused by the Iran war is not comparable in scale to the extreme freight rate inflation of the Covid period, analysis from Drewry Shipping Consultants shows.
According to Drewry Container Freight Rate Insight data, spot ocean on East-West and North-South routes at the height of the Covid shipping disruptions in 2020 were both much higher and more volatile than what has just been experienced by typical spot market shippers in the first month of the Iran conflict.
Comparison of rates rises in Covid period vs Iran war period - non-Middle East-connected routes (US$/container)
"Unlike the airfreight market, the container shipping market has not seen a significant fall in capacity after the start of the Iran war, with the exception of capacity to and from the Gulf," said Philip Damas, head of Drewry's logistics practice.
"Therefore, we believe that the increase in ocean rates on non-Middle East-connected routes will be manageable and shippers should not panic," he added.
Comparison of rate rises in Covid period vs Iran war period - Middle East-connected routes (US$/container)
Drewry Container Freight Rate Insight data shows that, on Middle East-connected routes only, ocean rates are undergoing Covid-level volatility and currently even higher freight rates.
Even then, it added that rates may soften as some opportunistic pricing adjusts.
