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Ocean Freight Container Shipping Spot Rates to Exceed Red Sea Crisis Levels, Xeneta Reports

Xeneta, a shipping analytics platform, recently revealed new data indicating that spot rates for ocean freight container shipping will surpass those seen during the peak of the Red Sea crisis earlier this year. June’s rates are expected to see big increases.

Peter Sand, Xeneta’s Chief Analyst, noted significant and rapid rate hikes throughout May, with further escalation expected:

“By June 1st, spot rates will reach levels not observed since 2022, during the height of Covid-19 disruptions in ocean freight supply chains,” Sand said. “The current mix of global supply chain disruptions and uncertainties is driving these rate increases. The market’s rapid and unexpected spike has caught even the largest ocean freight liner companies off guard.”

Notable Market Trends in Figures:

  • Far East to the U.S. West Coast: The highest rate on this route in nearly two years is projected with average spot rates likely to hit $5,170 as of June. The previous peak was $4,820, at the height of the Red Sea crisis in early February. This represents a 57% increase over May’s rates.
  • Far East to the U.S. East Coast: $6,250 per FEU was forecasted on this route, which comes out to slightly below the peak of the Red Sea crisis when rates hit $6,260. This is a 50% increase since April.
  • Far East to North Europe: $5,280 was expected in June, up 63% from April and up from $4,839 in February.
  • Far East to Mediterranean: $6,175 was projected for June, surpassing $5,985 per FEU which was last seen in January. This increase would be 46% higher than May.

Factors Behind the Surge in Spot Rates

Xeneta blames the ongoing Red Sea crisis and regional conflicts, as well as port congestion and the Q3 peak season, for the increases.

Sand explained, “Importers, having learned from the pandemic, are now shipping goods as early as possible to secure their supply chains. Some businesses are already dispatching Christmas cargo in May. This early peak season contributes to the market’s uncertainty. Unlike the clear cause of the Red Sea crisis earlier in 2024, the current scenario is more complex.”

Sailing around the longer route of the Cape of Good Hope, around the tip of Africa, rather than the Red Sea due to crises, has led to port congestion and other issues. Although carriers have taken steps to stem disruptions and volatility, rates are still increasing. Xeneta’s Sand also notes the general environment is one of uncertainty and unintended consequences.

Despite these challenges, Sand sees a glimmer of hope for shippers.

“Although spot rates will rise again on June 1st, the rate of increase is slower than in May, suggesting a possible easing of the situation,” Sand said.

However, he cautioned that shippers with lower long-term contract rates may have their cargo left at ports in favor of those paying higher rates, echoing issues seen during the Covid-19 pandemic. Freight forwarders facing new surcharges and being pushed onto premium services will likely pass these costs onto their customers.

“Carriers will continue to push for higher freight rates, so the situation may worsen for shippers before it improves,” Sand concluded.


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