By Vincent Wen    Photo：CANVA

Until 4/30, freight rates on major routes such as Europe and America have been declining in recent weeks. However, current market rates are still far higher than levels before the Covid outbreak and the Red Sea crisis, potentially prompting shipping companies to increase prices to maximize profits.

According to reports, shipping companies originally planned to increase General Rate Increases (GRI) on 4/1, but failed to do so on both 4/1 and 4/15. Currently, shipping companies are continuing to reduce sailings in an attempt to push for rate increases.

Based on past records, the consecutive holidays in China on 5/1 usually lead to a rise in freight rates. Coupled with the gradual exit from the off-season, prices are trending upwards. Additionally, factors such as the Red Sea crisis and the Panama Canal crisis may lead to short-term price increases.

However, for shipping companies, if the Panama Canal crisis and the Red Sea crisis are resolved in the second half of the year, freight rates may rapidly decline. Therefore, shipping companies are likely to take advantage of the current high rates to collect more cargo, in order to earn sufficient profits in the first half of the year and prepare for potential market fluctuations in the second half.

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