Volatility

People often say that there is volatility in the ocean freight industry, but what exactly do they mean by this statement? From a business standpoint, volatility describes the measurement of a price during certain times. But what could this mean in terms of the shipping industry? We all know that the industry is constantly changing. There are new carrier partnerships, like the P3 alliance, and other variables that impact the prices that shippers are paying for ocean freight containers. The international freight shipping market is volatile. The reason is because the ocean freight shipping rates continue to rise, despite the fact that there have been great improvements on the overall freight shipping market.

Volatility has existed in the market for some time. Some experts say that the European Union ban on shipping conferences began this trend a few years ago, because now the carriers are devoting more resources to negotiating pries. In the market of shipping dry bulk, most experts would say that this is also volatility, since the rates for dry bulk are often tied to the state of the current global economy. Freight forwarders have been keeping a close eye on the volatility of the freight shipping market. One issue that also impacts volatility is the capacity of space on the ocean freight vessels. If there is a major influx in capacity, either more or less capacity, as can be seen in recent years, then this will also make the international freight shipping marketing volatile. Time will tell if these trends continue.