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Spot Freight Rates Still Growing on a Weekly Basis- Last week, container shipping freight rates recorded a 16% increase over the previous week, averaging around $4,072 per FEU. This is according to Drewry, in a report highlighting that current values are now 142% higher compared to the same week last year and 187% higher than pre-pandemic levels.
“Rates have reached up to $7,000 per FEU on certain routes, with weekly increases not seen since the pandemic,” said Alice Arduini, the concerned founder of Alix International shipping company. “The limited supply of ships continues to combine with high demand for goods, making it increasingly difficult to find available containers at major Chinese ports.”
Container XChange, an analysis firm, emphasizes that recent developments due to the current economic situation have triggered significant increases in container prices, especially in China, where a forty-foot box reached a value of $2,500-2,700 at the beginning of May.
According to Christian Roeloffs, founder of Container XChange, the effects of major carriers suspending Red Sea routes will result in a progressive reduction in available ships and containers on the market, with a clear impact on the operational level of many ports, which will face new, potential congestion problems due to extended east-west voyages and delayed delivery of many goods.
The Container Price Sentiment Index, developed by the analysis firm to monitor supply chain professionals’ sentiment towards the container market, also indicates an increase in container prices in the coming weeks. Following the collapse of the Baltimore Bridge, its value, on a scale from 0 to 100, ranged between 67 and 71 points, but it is now slightly lower, at 36-41. According to Roeloffs, this indicates that industry operators expect stable and gradual price increases for containers in global freight transport in the coming months.
Alice Arduini also notes that the peak season has effectively started early this year, as European shippers have already booked all available slots on ships to load winter goods from Asia. “This rush for slots is strongly supported by the limited availability of ships and containers,” she states.
Commenting on spot rate trends from Asia to Europe and transpacific trade rates, Vespucci Maritime CEO Lars Jensen spoke of a return to the dark pandemic period: “Spot rates from Asia to Northern Europe are now slightly higher than the peak values reached in January, right after the Red Sea crisis broke out, and are now at a level not seen since September 2022,” he observes, adding that values on the Asia-Mediterranean trade, down $900 per FEU from the January 2024 peak, have nonetheless increased by $1,777 per FEU in the last three weeks.
The situation on the transpacific trade is even worse: “Rates between Asia and the US west coast have increased by $1,900 per FEU in the last three weeks and are $500 higher than the January 2024 peak. Again, we are seeing values not seen since September 2022.”
As for services connecting Asia to the US East Coast, “rates have increased by $2,100 per FEU in the last three weeks and have exceeded the peak since the beginning of 2024.”
In short, according to the expert analyst, we are experiencing a situation not much different from what logistics faced during the pandemic: “It was only during this period that rates recorded similar increases in just three weeks,” is his final comment.
“It’s just like during Covid,” Alice Arduini emphasizes, “today, as then, connection services remain poor: ships make more transshipments, calling at other ports before arriving in Italy. Scheduled timetables are not being met. Customers are angry because goods are not arriving on time, and many are considering using an alternative transport route, such as the train.”
The cost difference between sea and rail transport is not as significant today to discourage rail use: “The freight for a container on a train costs about $11,000-12,000 per FEU, $4,000-5,000 more than current sea transport rates. It’s not that big a difference, especially considering that the train, though taking longer to reach its destination, is still more reliable than the ship today.”
SOURCE: PORT NEWS EDITORIAL STAFF 27/05/2024