Renato Lima, Managing Director, SIRVA Relocation Brazil, looks at the ocean freight market from a Brazilian mover’s perspective.
The COVID-19 pandemic caused significant disruptions to the global supply chain, leading to congestion at ports and a surge in shipping demand. This, in turn, resulted in skyrocketing ocean freight rates and accessorial charges. The shipping industry is dominated by a handful of large companies, with the top ten liners controlling approximately 85% of the global market.
In response to the pandemic-induced market turmoil, the United States government enacted the Ocean Shipping Reform Act of 2022. However, this legislation has not been effective in curbing shipping lines' excessive charges.
Brazilian movers have observed that while ocean freight rates have somewhat normalised to pre-pandemic levels, shipping lines have resorted to levying exorbitant accessorial charges to maintain their inflated profits. For instance, the free container demurrage/detention period has been reduced from 10 to 21 days to a mere five days, and the associated charges have skyrocketed from around US$30 per day to US$150-US$200 per day.
Additionally, some shipping lines have implemented restrictive policies, refusing to accept directly booked Used Household Goods (UHG) shipments from movers. Instead, they mandate the involvement of a freight forwarder to act as an intermediary.
These practices have led to instances where the ocean freight for a 200 kg/500 lb LCL shipment is as low as US$200, yet the freight forwarder charges an additional US$3,000 in fees for deconsolidation, container cleaning, storage, and other miscellaneous services.
In light of these challenges, Brazilian movers have identified a few potential remedies ...
Photo: Renato Lima, MD, SIRVA Relocation Brazil.