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Correlation between disruption and increasing box rates deciphered

World Bank deciphers the correlation between disruption and increasing box rates

Writing on the Splash247 website, Sam Chambers reports that the World Bank has produced an index that correlates disruption in container shipping with increases in freight rates.

With our large portfolio of ocean freight forwarding and logistics services, Davies Turner has seen a period of unprecedented disruption for liner shipping, which in turn has created the conditions for the greatest earnings the sector has ever recorded.

Chambers writes that quantifying how this disruption – whether it be covid, the drought in Panama, or the Red Sea shipping crisis – equates to freight rates increasing has hitherto be an inexact science. However, a working paper for the World Bank has managed to crunch the numbers via a newly launched Global Supply Chain Stress Index (GSCSI).

Developed by Jean-François Arvis, Cordula Rastogi, Jean-Paul Rodrigue, and Daria Ulybina, the index shows that each 1m teu of the container trades coming under stress increases the Shanghai Containerized Freight Index (SCFI) – a leading spot indicator – by USD2,300 per teu.

The Splash 247 article can be read in full here: https://splash247.com/world-bank-deciphers-the-correlation-between-disruption-and-increasing-box-rates/

Davies Turner remains committed to helping clients manage the difficult situation facing container shipping at present and mitigate where possible additional costs incurred. Our ocean freight team will endeavour to keep in close contact with all clients to provide updates on specific movements.

For more information about Davies Turner’s ocean freight forwarding and logistics services, please contact ocean@daviesturner.co.uk or visit the relevant pages of this website.
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