# 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  
Whereas the previous chapters place their focus on the changes in maritime transport rates during the pandemic and the Russian invasion of Ukraine, the following section focuses on the changes in the value of freight rates during this crisis, which have been elaborated based on the available data. In the last months of 2021, when the COVID-19 pandemic was still going strong, moving goods along the main maritime routes created many problems for logistics departments at companies around the world. The expenses related to maritime transport have tripled since Europe was in lockdown and there are several reasons why this has happened [51]:  
1. Due to restrictions in mobility that were in force in most countries, many shipping companies had no choice but to send their ships to navigate their routes, but with much unused loading capacity due to cancellations or reductions. 2. China was faced with more volume of goods for export to main world ports. Many world ports were facing long waits for unloading, which led to slower container ship rotation and, consequently, to higher prices of the contracts for container shipping. 3. At the beginning of 2020, freight rates were going up because of the provisions laid by the International Maritime Organization concerning the change of fuel. In line with the provisions, since 1 January 2020, shipping companies are under obligation to use VLSFO (very low sulfur fuel oil). The level of sulfur in the fuel the ships use during navigation must not be over 0.5% m/m [52]. In the period from March 2020 to September 2021, the rate for one 20\({}^{\prime}\) container rapidly grew due to the disruptions in the supply and the trading chains [53]. The uncertainty that characterizes the maritime container market today has been the greatest since the beginning of the \"containerisation\" [33]. The evolution of the freight rates that has been happening in the last two years is the reflection of the stress in the global supply chains and the pressures exerted on the private consumption. At the moment when the market started to recover from the COVID-19 pandemic, Russia started its full invasion of Ukraine [54], so March 2022 recorded the highest freight rate indices ever [55]. It is the imbalance between the rising demand and reduced supply capacities that prompted the rise of the freight rates on all maritime container routes. The growth in demand was much higher than expected [14]. Despite the fact that the increase in the freight rates suggests that the market is successfully dealing with supply and that it compensates the drop in demand with higher prices, most key players on the market have requested financial support from their governments. More precisely, even six out of ten largest shipping companies have done so: CMA CGM, COSCO Shipping Lines, HMM, Evergreen Marine, Yang Ming and Pacific International Lines [40]. Figure 1 shows the New ConTex index values for the period from 1 January 2013 to 10 July 2022. It clearly shows that the index value began to grow in the last quarter of 2020 and it grew exponentially until September 2021. During September and October of 2021 there were no major oscillations and the beginning of November recorded a drop after a longer period of stability, which is related to the COVID-19 pandemic and its influence on the maritime container industry. It was discontinued by the Russian invasion of Ukraine when the index started to rise again. Although the companies on this market have been through difficult two years, they all agree that 2022 is even more challenging because of the disruptions caused by the Russian invasion and the growing inflation (17 June 2022). Figure 2 shows that since the beginning of the pandemic, the consumer price index in the European Union has been continuously growing, even during the Russian invasion of Ukraine. Moreover, it is evident that the biggest growth was recorded at the end of February and beginning March 2022.