THE IMPORTANCE OF REDUCING FREIGHT RATES AND MARITIME TRANSPORT COSTS
THE IMPORTANCE OF REDUCING FREIGHT RATES AND MARITIME TRANSPORT COSTS

Summary/Abstract: Freight rates in 2011 and at the beginning of 2012 often remained at unprofitable levels. Within containerized cargo substantial freight rate drops have been reported. Vessel oversupply can be indentified as a driving factor behind this development. The investment in large capacity within container segment accelerated competition as ship operators were willing to accept freight rates below or close to operating costs. While freight rates have declined or remained at historically low levels, ship operating costs have grown moderately. In addition, bunkering prices continue to recover from their collapse during the economic crisis, offsetting temporary freight-rate increases. This paper proposes and discusses three strategies for individual countries to influence transport within their seaborne network. These include development of costal shipping and efficiency programmes for ports. In addition, policies should be applied that aim at improving the port connections with hinterland markets.

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