Despite US and UK strikes on Houthi positions in Yemen, attacks on Red Sea traffic continued this week both on US naval assets and commercial vessels, according to a new analysis by Freightos.
The online freight marketplace noted that the majority of container carriers continue to divert away from the Suez Canal while the safety threat persists, and demand is increasing with the Lunar New Year just three weeks away.
"As such, shippers have started to face some empty container shortages and are seeing available space getting tight at some Asian origin ports due both to increasing demand and to delayed departures and arrivals resulting from the longer transits and disrupted schedules," Freightos said.
The analysis noted that some carriers are adding Asia-Europe sailings to address the current supply imbalance, and others — despite overall fleet growth — are chartering additional capacity to accommodate the longer routes.
With this, ocean rates ex-Asia ticked up last week, but daily rates as of Monday for Asia-Mediterranean containers had increased by more than US$1,000 to about US$6,700/FEU as mid-month GRIs started to be introduced.
Asia - N. Europe and N. America rate increases are also expected to push prices up significantly this week as well, Freightos added.
"The disruptions and demand increases are putting enough pressure on prices that some shippers with long-term ocean contracts are also facing surcharges, and others may not be seeing all the containers moved," said Judah Levine, Head of Research at Freightos.
He added that some carriers have also temporarily suspended long-term Asia - N. Europe contract negotiations as the market is in flux.
"Equipment shortages and a possible lack of space are likely to be at their worst in the next couple of weeks due to pressure to get volumes moved before LNY, and this demand increase is likely playing a role in the degree to which rates are currently climbing," Levine further said.
He added that unlike during the pandemic, though, when a sustained surge in volumes overwhelmed ports and caused congestion that just kept getting worse, carriers — especially post-LNY — should be able to establish a new routine that will keep containers flowing and avoid significant congestion.
"So, when the market enters its typical lull after LNY, transit times will remain longer but should become more predictable, and it is likely that prices will subside somewhat as well, though they will likely remain elevated until Red Sea traffic resumes," Levine added.
Based on Freightos' Asia-US East Coast prices (FBX03 Weekly) climbed 7% to US$4,278/FEU; Asia-N. Europe prices (FBX11 Weekly) increased 8% to US$4,757/FEU, and Asia-Mediterranean prices (FBX13 Weekly) increased 5% to US$5,440/FEU.
Meanwhile, in air cargo, experts continue to expect some ex-Asia shipments to shift from ocean to air to avoid delays ahead of the holiday.
The Freightos Air Index rates showed that China - N. Europe weekly prices increased 91% to US$3.55/kg and N. Europe - N. America weekly prices increased 2% to US$1.84/kg.
