Freight rates will begin to stabilize in mid-2022 - Aurelio Martínez, President of PAV

Speaking at the Mediterranean Ports and Shipping 2021 Conference, Port Authority of Valencia (PAV) President Aurelio Martínez said freight rates will return to normal in the second half of 2022 when international demand for containers slow down.

container freight rates

Freight rates will start to stabilize in mid-2022

The president of PAV stated: “Higher freight rates mean higher costs and therefore fewer exports for regions like ours, which will mean that the growth rate will be lower than what we could have obtained in a normalized context”.

Martínez spoke at the opening of the Mediterranean Ports and Shipping 2021 Conference. In his speech, he explained the transport tariff model in the current context, which is characterized by record high rates, sustained increases over a long period of time and increases in all routes and types of traffic.

This increase in freight rates is due to various reasons, according to the PAV president, such as "the increase in internal demand, especially in the United States, the congestion generated in the North American logistics chain where there are ships stopped for 15 days in ports such as Los Angeles to unload, the deficit of containers in the face of the increase in international demand, or the prices of bunkering and fuels."

As a result, this situation has increased ship time in ports as well as import and export costs, impacting inflation, even inadequacies in the entire logistics chain in some countries, and a slowdown in world growth.

The President of PAV believes that we can draw lessons for the future from the situation affecting maritime logistics. "When you launch a measure to increase internal demand with the same infrastructures and suddenly many ships come in, you cannot provide services to everyone," he explained, continuing to point out. found that "this is the problem, as the infrastructures of the United States were not prepared to withstand this avalanche of imports, which has been one of the fundamental reasons that are affecting freight rates".

In this respect, he assures that in the US, inventories are still very low and are selling a lot, so it needs to be replenished. “The boom in demand will continue for a few more months, but it won't last forever. We believe that by the middle of 2022 this situation will normalise.”

Regional Minister for Territorial Policy, Arcadi España, who also participated in the event, warned of the fragility of globalization in the face of value chain breakage and the need for more regionalized globalization.

Regarding environmental challenges, Arcadi España noted that "we have been obliged to accelerate the changes in digitalisation, reduction of carbon emissions and innovation."

The Mediterranean Ports and Shipping Conference is an international logistics event with two days of presentations by 30 speakers who focus on the needs and challenges facing the transport and logistics sector in the Mediterranean region.

The conference was attended by more than 100 delegates, including representatives of administrations, company managers, port authorities, shipping companies, terminal operators, importers and exporters, and along with other participants.

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