For almost three months now, the spot freight rate for containerised goods shipped by sea from North Europe to the US East Coast has been 210% higher than last year (July 1 – September 23) according to BIMCO, one of the largest of the international shipping associations representing shipowners.

In a statement, it said it wasn’t until April 1 this year that we saw the ripple effects from the globally stretched supply chains impacting front-haul freight rates on the Transatlantic container shipping trade lane.

"At that time, spot freight rates for a 40-foot container jumped 52% from US$2,329 to US$3,544 on average for the trade lane. The Transatlantic average spot rates continued to climb, reaching US$5,798 per FEU on July 1 before flatlining just south of US$6,000 reaching US$5,893 per FEU on September 23.

"In addition to the ripple effects from stretched global supply chains, strong demand from US consumers also contributed to the hike in spot rates on this trade," said Peter Sand, BIMCO’s chief shipping analyst.

"Imports to North America from Europe have increased by little more than 500,000 TEU from last year and liner operators have responded by deploying significantly more capacity on that trade," Sand added.

Demand and deployed capacity sharply up

During the first seven months of 2021, 3,292,000 loaded TEUs were moved from Europe to North America which is 500,000 TEU more than the same period last year, representing a growth rate of 18.5%.

Comparing 2021 to the pre-pandemic year of 2019, growth is up by 14.5% as demand only fell 7.5% from 2019 to 2020.

In a bid to match container shipping capacity to the higher demand, liner companies added 21.4% of cargo carrying capacity in the 12 months from July  1 in 2020 to the same period this year.