Freightos numbers show volatility


2023 was supposed to be a year that saw the global economy in general and logistics markets in particular return to some sort of normality. This has turned-out to be only partially true. The latest bank-run in the US is an indicator that there are underlying problems in the financial system. In addition, global trade is struggling to cope with economic and political tensions built-up over thirty years of what might be called over-optimism. This is also reflected in markets such as shipping and airfreight.

A strong insight into the state of these markets was given by the latest comments from Freightos, the web-based freight purchasing systems company. Discussing the company’s results for 2022, Freightos’ CEO Zvi Schreiber observed the extreme volatility that still plagues sea and air freight prices. Referring to Freightos’ price indexes, he commented that the “headline FBX global index is down more than 80% from a year ago. FBX01, the bell-weather trans-pacific index is down a staggering 94%. Our Freightos air index – FAX global – shows that air cargo prices are also down some 25% in the market from a year ago. In addition to prices being down, volumes are down, too.”

Mr Schreiber also observed that the state of the container shipping sector had changed, with the boom of 2021-2022 effecting the attitude of the shipping lines, as when “their ships were full, they were over full. They were charging $20,000 at one point to ship a container Trans-Pacific. Now it’s about $1,000, just to give you an example, and there was little appetite for innovation, amongst the ocean liners when the market was so hot.” Now he believes they are under-pressure and will need to change their businesses; “I believe there will be an improved appetite for the ocean liners, to digitalize”.

Freightos saw its revenue for the year increase by 71.7% and its losses moderate. Freightos is a small, start-up company and its perspective on markets may not be perfect, however its data is useful in describing the magnitude of the swings in price for freight transport, and is an indicator that this volatility may trigger changes in the sector. Large suppliers, such as the shipping lines, have had their balance-sheet strengthened over the past three years, but they may be tested again in the near future. Shipping lines, air freight airlines and others may need to respond at the strategic level to what might be severe pressure.

Author: Thomas Cullen

Source: Ti Insights


Supply chain strategists can use GSCi – Ti’s online data platform – to identify opportunities for growth, support strategic decisions, help them stay abreast of industry trends and development, as well as understand future impacts on the industry. 

Visit GSCI subscription to sign up today or contact Michael Clover for a free demonstration: [email protected] | +44 (0) 1666 519907