Ocean cargo freight rates calm down, after months of turbulence

US economic slowdown, surging oil prices and increasing supply of shipping vessels combine to trigger critical correction.

After months of showing a relentless surge, ocean freight rates for cargo being traded from the country finally seem to be easing up. While freight rates for container and bulk cargo to a number of destinations had as much as doubled over the last six months, the market has now largely stabilized and may even witness a downward correction over the next few months. Slowing North American demand, a sharp uptake in crude oil prices and increased supply of shipping vessels are the major reasons for this stabilization. The drop in tanker demand has translated into a significant plunge in revenues for shipping companies. For the government owned SCI, earnings from tanker operations have fallen by 40 per cent over the last six months.
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