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Delays in shipping and skyrocketing freight costs! Beware of freight bubbles!
Jan 16,2024
The Red Sea shipping crisis has not yet been resolved, and most shipping companies have chosen to bypass the Cape of Good Hope, resulting in a decline in global cargo ship capacity,Containerized freight rates between Asia, Europe and the United States continue to rise.
In addition to taking longer, sailing around the Cape of Good Hope means burning more fuel and emitting more carbon,These costs are ultimately passed on to the shipper..
Although shippers have long-term contracts, the capacity crunch following the carrier's termination of the Red Sea route will leave shippers with no choice but to accept a premium to ensure timely delivery of their goods. Some freight research experts say carriers are enjoying"Disproportionate revenue growth".
Sea-Intelligence, in its latest analysis, also warned that shippers exporting from Asia will be limited in the coming weeks: "In Asia-Northern Europe, as some services from Asia were delayed pending diversions, while some services apparently arrived in Asia very late, there was a rapid shortage in the weeks of mid-January, and capacity is expected to drop sharply in the week of January 22."
Market demand is increasing and all ships are full in January. The high demand for capacity means that carriers with long-term rate contracts are forced to enter the in stock market, which drives higher rates.
The latest Xeneta data shows that since mid-December, ocean freight rates between the Far East and Northern Europe have risen by 124 per cent, while freight rates into the Mediterranean have risen by 118 per cent. Freight rates between the Far East and the East Coast of the United States rose by 45%.
FreightRight said: "The high rates may continue, which is good news for carriers and freight forwarders, as higher rates mean higher profits. However, this is a huge challenge for shippers, who find it difficult to pass on this premium cost to consumers."
Global freight digital platform Freightos said on Wednesday,At present, the spot freight rate of 40-foot container cargo from Asia to northern Europe has reached 4,000 US dollars, a sharp increase of 173 per cent compared with that before the diversion began in mid-December.
freight rates from Asia to the Mediterranean have been increased$5175/FEUSome shipping companies have announced that freight rates on this route will exceed from mid-January.$6000/FEU. In addition to the increase in container freight, a surcharge of $500 to $2700 may make the price of the all-inclusive higher.
Freight rates from Asia to the East Coast of North America have gone up55%, to $3900/FEU. S. West Coast freight rates are up 63% to more than $2700 compared to before cargo was diverted to avoid Red Sea-related problems.
According to Dreary Worldcontainer indexSince December 21, freight rates from China to Europe have more than doubled, and freight rates from Shanghai to Los Angeles have increased.30%.
A British family business called Boxer Gifts has revealed that part of the cost of the company's products due to shipping delays and price increases caused by the Red Sea crisis.It has soared 250 percent.Many British companies have expressed similar concerns.
Mediterranean Shipping (MSC) Announces Price IncreaseIt covers routes from the Far East to the Western Mediterranean, the Eastern Mediterranean, the Adriatic and the Black Sea, with effect from 15 January 2024.
CMA CGM (CMA CGM) announced that,From Asia to the Mediterranean, Northern Europe to impose newFAKRate. The new rates will apply to dry, overloaded, refrigerated and empty cargoes from 15 January 2024 (loading date) until further notice.
Hapg-Lloitt (Hapag-Lloyd) announcedAs of January 15, 2024, the GRI for 20-foot and 40-foot dry container cargo (including tall boxes and 40-foot non-operating reefers) from Asia to Latin America, Mexico, the Caribbean and Central America will be launched soon. The standard is US $1000 and applies to all containers until further notice.
Maersk Announces New High Season Surcharge (PSS) Worldwide,The effective date is January 8, excluding Vietnam and Taiwan. The Vietnam to West Africa surcharge will take effect on January 18, and the Chinese Taiwan to West Africa surcharge will take effect on February 2.
Due to the detour, the shipping period has been extended by at least 7 to 15 days, and freight rates are in a frenzy as described above. Coupled with tight capacity, future shipments may face more problems.
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If there is an urgent need for delivery, it is advisable to deliver the goods as early as possible, and the later cost may be higher. If there is no urgent need for delivery, it can be decided after the year. At the same time, we should be alert to the price speculation of freight service providers and refuse ridiculously high or low quotations.
Article Source; Mike Foreign Trade Says
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