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Freight rates soar 80%! Major shipping companies have announced the suspension of all Red Sea voyages.
Jan 05,2024
In recent weeks, the Red Sea has been turbulent, with frequent attacks on container ships, exacerbating the global shipping crisis.
On January 2, 2024, Maersk's latest announcement announced that after the accident involving the ship "Maersk Hangzhou" on December 30, it has decided to continue to suspend navigation in the Red Sea and suspend all transits through the Red Sea/Gulf of Aden until further notice.
At present, some Maersk ships are diverted to bypass the Cape of Good Hope in South Africa.
Source: Maersk Bulletin
Two days ago, Maersk announced a 48-hour moratorium on all ships passing through the Red Sea. The decision to suspend all Red Sea navigation until further notice means that Maersk's "return to the Red Sea" plan has failed!
Another shipping giant, Hapo-Lloyd, decided to avoid the Suez Canal and the Red Sea. A spokesman for Hapg-Lloth also stressed that he is closely monitoring the situation in the Red Sea every day, but no ships under his banner will pass through the Red Sea until January 9, 2024.
Source: Hapg-Lloth's official website
Affected by the still unstable situation in the Red Sea, a series of effects are being felt.
The Suez Canal and the Red Sea route are a key Asia-Europe waterway. Before that, many shipping companies had diverted to the Red Sea because of the slowdown in the speed caused by the drought of the Panama Canal. Now shipping companies are once again facing the challenge of diverting. Many people in the industry said that they might choose the route through the Cape of Good Hope in Africa, but this is a longer and more expensive route. As a result, international shipping prices have also risen.
Decreased throughput on key routes Increased costs for logistics companies
US logistics company OL USA has 15% to 20% of its business through the Red Sea. The CEO of the company said that since the conflict in the Middle East escalated in October 2023, shipping prices have risen sharply. The reason for this price increase is not related to the imbalance between supply and demand during the epidemic, but to the decline in throughput in the Panama Canal and the Red Sea region. And now it is the eve of the Chinese Lunar New Year, the peak period of production and export, and logistics demand will increase, so shipping prices may continue to rise.
Alan Bell, CEO of OL, an American logistics company: Since October 2023, freight rates have risen by about 70% to 200 percent, and as we usher in the (Chinese) Lunar New Year, freight rates are likely to continue to rise.
According to China Business News, according to the large ship schedule of the Shenzhen Yantian Port European route in January 2024, there were empty shifts (Blank Saling) on January 8, January 15, January 17, January 18, January 22 and January 25. Empty shifts mean that large ships cannot dock at domestic ports. For freight forwarders and foreign trade enterprises, there is no shipping space to book.
In addition to the phenomenon of empty classes, price increases are inevitable. According to the latest report released by the Shanghai Shipping Exchange, freight rates on Asia-Europe and other routes continue to soar. Among them, Shanghai port exports to Europe, the Mediterranean basic port market freight rates (sea and sea surcharge) of $2694/TEU and $3491/TEU, up 80.0 per cent and 70.0 per cent respectively from the previous period.
In the face of the complex and volatile situation in the Red Sea and rising shipping rates, for freight forwarders and shippers, problems such as extended shipping schedules, difficulties in booking, and delays in delivery have followed. For shipping goods, freight forwarders must plan ahead.
Source: Search Air Network
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