High freight charges unlikely to come down in the next 1-2 years

High freight charges, which have gone up by nearly seven times due to the Covid-19 pandemic, are unlikely to come down in the next couple of years, says Rizwan Sajan, founder and chairman of Danube Group.

“I don’t think these freight rates are going to come down in the next 1 or 2 years. Freight costs have gone up due to shortage of ships and containers because a lot of ships were dismantled during and pre-pandemic period,” he said.

“Challenge is the shortage of the inventory because of the high freight rate. We used to pay $1,200 for a container and now we are paying almost $6,000-$7,000 in the freight cost. The majority of the markets and factories are still not functionating at full capacity whereas demand has gone up in many countries. Getting inventory is the problem and not selling it,” he added.

— waheedabbas@khaleejtimes.com