Our Upply benchmark is noticing a sharp increase on the shipping lane Shanghai / Dubai. How can we explain this trend? Captain Upply enlightens you.
Let’s outline the significant reasons explaining the noticeable pick of Ocean Freight rates on the Shanghai-Dubai route.
First of all, this is a very cash minded market, pushing the demand to bankable destinations (Jebel Ali, Dubai, Doha). Reefer business is the leading container business on this route in terms of revenue, thus impacting dry market and pushing rates upwards.
Direct capacities from China to Middle East are in heavy demand, reefer cargo securing space first (before dry cargo). Maritime routes are changing. Traditionally, the Middle East range was coupled with the IPBS range; Now we see that the trend is focusing on direct approaches for both.
Let’s turn to another point: Very limited containerized exports are available from the ME Ports, ending in loading empties at Carrier’s costs. This partly explains the high price to bear in terms of freight rates for the incoming cargo.
Finally, Dubai is now a fantastic African Hub, booming in demand to avoid importing issues for some Maritime African Countries, the Land entrance by truck being the only solution to by-pass import restrictions from some State Regulations (Algeria is a known example).
To discover the latest trends on ocean freight rates, go to the benchmark page of upply.com!
See you next week,
Captain Upply
Photo credit: ID 138562211 © Galina Sandalova | Dreamstime.com
