The cost of shipping goods on global trade routes has decreased by 85% from its peak due to a reduction in demand for goods caused by the cost of living crisis and pandemic-related supply chain disruptions easing.

Despite a 2.1% monthly gain in January 2023, the quantity of goods shipped was down 5% from January 2022 levels, according to the Kiel Institute.

The S&P monthly survey of purchasing managers indicated that new export orders contracted across the world throughout the second half of last year and in January. Last month, the IMF forecast that global trade growth would decline to 2.4 per cent this year, from 5.4 per cent in 2022.

Shipping groups are expected to retain the benefits of higher rates for at least the current quarter due to many clients being on long-term contracts.

However, groups are cutting sailings and excess shipping capacity could depress freight rates further. While customers are aware that shipping services could continue to be disrupted by global events, importers have welcomed the fall in prices.