# Volatile Freight Rates in Maritime Container Industry in Times of Crises
## 3 Maritime Container Market and the Freight Rates in Times of Crises
### Freight Rates on the Maritime Container Market in Times of Crises
In February, the index value was 113.65, growing by 2.3% in March. In the entire observed period, the index grew by 12.10%. These values  
present a correlation between maritime transport rates volatility and the consumer price index in the European Union. The values of the global maritime container freight index for the period from the beginning of the COVID-19 pandemic until the end of May 2022 are displayed in Figure 3. It shows that the index value slightly drops in March and April of 2021, after a steady growth from April 2020 to February 2021. It peaked in September 2021, which is in line with the New ConTex index. However, it can be concluded that, unlike the New ConTex index, the values of this index have been continuously dropping since February 2022. On the other hand, it is important to note that in September 2021, the freight rates reached their record values of almost USD 10,400, which is 6.8 times the price from February 2020. The impact the increase in freight rates has on the maritime container industry does not only bring the speed of the recovery of the entire global economy into question, but also [13]:  
1. Causes increase in import and consumer prices. 2. Price fluctuations affect entire economies and various goods and are not occurring only in underdeveloped or developing countries. 3. Affects global production and costs. Figure 4 shows top ten consumer goods according to an estimated price increase displayed in percentages. The highest increase in prices is estimated for the computer, electronic and optical products. The reason for that lies in the fact that most of these products are manufactured in eastern Asia and need to travel long distances to reach their final consumers. Higher freight rates do not affect all the consumer prices equally. They  
Figure 2: EU consumer price index, February 2020-May 2022, Source: according to [53]. impact more the prices of those products that are more integrated in the global supply chains [13]. Changes in consumption patterns are first of all connected with the type of goods or services. As a rule, the basic (essential) goods, such as food, and the luxury items are most resilient [23]. This increase in the freight rates on the maritime container market could on  
Figure 4: Top 10 consumer goods products according to the estimated price increase (%). Source: compiled by the author according to [13]. Figure 3: Global maritime container freight rate index, 29 February 2020-31 May 2022. Source: compiled by the author according to [[https://www.statista.com/statistics/1250636/global-container-freight-index/](https://www.statista.com/statistics/1250636/global-container-freight-index/)]([https://www.statista.com/statistics/1250636/global-container-freight-index/](https://www.statista.com/statistics/1250636/global-container-freight-index/)) (accessed on 9 July 2022). average lead to the increase in the consumer prices by 1.5% in the next year. This increase will be even more evident in the countries that depend on the import activities [50]. Rise of the freight rates will reflect on the production costs as well, which can eventually influence the dynamics of the development of national economies. It is to be expected that this influence will not be equally distributed, but rather be greater in smaller economies [13]. Higher freight rates in maritime container industry followed by disruptions in the supply chains by 10% will result in the drop of industrial production in the United States and the euro area by over 1% [13]. Although the United States started their recovery of industrial production in July 2021, followed by strong growth of private consumption, industrial consumption is still recording negative growth rates. This is the best indication of how disruptions on the maritime container market dictate the speed of the recovery of the global economy [13]. The Russian invasion of Ukraine has shaken the freight rates stability on the maritime container market even more in the moments when the industry was just starting to recover from the effects of the pandemic.