SPIKING freight rates, seaport congestion and empty container shortages - issues that wreaked havoc during the Covid scare - are back as we enter the peak season, Reuters reports
SPIKING freight rates, seaport congestion and empty container shortages - issues that wreaked havoc during the Covid scare - are back as we enter the peak season, Reuters reports. Spot rates to send an FEU from China to North Europe was US$4,615, almost 3.5 times higher than on May 1, but below the all-time high of $14,407 on January 2022, said Peter Sand, chief analyst at pricing platform Xeneta. That rate excludes $10,000 'diamond tier' rates for priority shipments.
The China to US east coast spot rate was $6,061. That rate was $2,772 on May 1 and hit a record high of $11,900 in January 2022, he said.
'There is a cocktail of uncertainty and disruption across global ocean freight supply chains,' said Mr Sand.
'It is the speed and magnitude of this recent rate spike that has taken the market by surprise,' he said.
The container sector's woes go back to December, when Maersk, opens new season when Hapag-Lloyd and others diverted vessels away from the Red Sea and Suez Canal to avoid Houthi missile attacks from Yemen.
Ships on the China to Europe and China to US east coast lanes are instead sailing around Africa, cascading disruptions and higher costs across supply chains that rely on ocean vessels that transport about 80 per cent of international trade volume.
Said Freightos research chief Judah Levine: 'In the near term we will see a significant crunch in the form of very elevated rates and additional delays'.
Port congestion in China and other Asian ports pressures an over-stretched box market that is already suffering shortages of vessel space and equipment, said analytics provider Linerlytica in a recent report.
Singapore, the world's second-busiest container port, now experiences severe delays. Ships are skipping calls there, upending schedules at downstream ports, said Linerlytica.
Empty containers also are piling up in Sri Lanka and the United Arab Emirates, while China and Singapore are reporting shortages, said Koray Kose, chief industry officer at Everstream Analytics.
'We're sailing into the storm,' Mr Kose said.
SeaNews Turkey
