Steep drop in container freight rates: Global container freight rates have plummeted to levels even lower than pre-pandemic rates, currently standing at only $1,380, an astonishing 88% decline from their peak just two years ago in September 2021.

Why it matters: This significant decrease in container shipping costs is a double-edged sword, as it places pressure on the industry’s investments in safety measures and decarbonization initiatives.

Factors contributing to the decline: A combination of economic and geopolitical uncertainty, coupled with a decrease in demand, has led to excess capacity and falling freight rates, making it over 80% cheaper to ship a container between Asia and Europe or the US in April 2023, compared to the same time last year (AGCS).

The role of larger vessels: The trend towards larger, more efficient container ships has been reinforced by the current downturn, as well as goals