International freight update: changes in trade dynamics
27 March 2025
Key points:
- Global ocean shipping has become more variable over the past several years.
- Price movements are increasingly dictated by regional events.
This article is the final part of our Top 10 Trends of 2024 series.
Ocean-bound freight prices have fallen markedly since the start of the year, continuing the generally unpredictable conditions in international freight markets since 2021.
Changes in trade dynamics over the past few years have had two effects:
1. Higher freight cost variance
Container pricing has seen much higher variance month-on-month and year-on-year compared to the pre-COVID period. Prior to 2019, prices very rarely moved more than 20% above or below the average annual price. Since then, prices have tended to shift more rapidly.
Due to the rapid price shifts, freight costs have become much more variable and can affect the price of exports much more than previously. The Freightos Baltic Index is currently at 2221 points, which is not far off the 2016–19 baseline, but is an almost 50% drop-off since the start of the year. Given prices are more volatile, this makes planning challenging and pricing less predictable.
2. Substantial pricing changes between different lines
Pricing between different routes has changed substantially. In the past, price movements across different regions tended to correlate quite strongly with each other. However, in 2024, we saw considerable variance between different shipping lines, as region-specific disruptions affected shipping across different areas. In particular, disruptions to the Europe-Asia freight trade have occurred due to safety concerns on the route around the coast of Yemen.
Since this disruption is highly localised, it has affected freight prices overall but has not profoundly affected Australian prices. This meant in 2024, that Australian prices were both lower and slightly more stable than the global market.
Overall, shipping markets are more stable than they were over the COVID era, but more unstable than is historically normal. Despite this, supply chains have displayed considerable resilience over the past few years.
Attribute content to: Tim Jackson, MLA Global Supply Analyst
