Containerized Logistics Supply Chain Normalize in 2024

Author Name: Emma Hau – Marketing Analyst at FreightAmigo | 13/4/2022

Management consultancy firm McKinsey & Company stated that container freight rate will remain elevated throughout most of 2022 and the global containerized logistics supply will only resume normal in 2024. Freight rate in 2024 is likely to be 50% higher than pre-pandemic levels.

According to the report, COVID-19 led to a boom in the US containerized consumer goods demand, causing congestion, and reducing effective container logistics capacity. Global container freight rates have, on average, increased to four to five times their 2019 levels. However, shippers have experienced record low reliability both at sea and on land.

Although container shippers are actively recruiting vessels to upkeep container logistics capacity, disruptions and challenges show no signs of ending. Therefore, it is almost impossible to predict exactly when global containerized logistics supply chains will normalize.

McKinsey developed some possible scenarios of rate outcomes for the container freight market. Rates are expected to remain elevated throughout the 2022 contracting season and decline rapidly after Q3 2022. However, this is not likely to happen due to recent lockdown measures in China. Ongoing lockdown measures in Shanghai further disrupt the global containerized logistics supply chain.

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