Baltic Exchange said January was clearly a volatile period, but by the end of the month, it appeared that the developments were beginning to cool off.
The London-based exchange that provides real-time maritime shipping information said Asia to Europe trades, which are the ones most heavily impacted by the Red Sea crisis, saw spot rates level out and decline ever so slightly towards the end of January.
"This is not quite the case yet for the head haul Pacific rates," said Lars Jensen, chief executive officer of Vespucci Maritime, a consultancy services firm in container shipping, ports, and terminals.
"A reasonable interpretation of the developments includes two core parameters: Fear and Chinese New Year," he added.
The analysis noted that Europe is especially hard hit by service disruptions, and it is only logical that the strongest response should be seen here first.
"'Fear' might perhaps be too subjective a word — one could also say the importers learned a lesson from the pandemic," Jensen said, adding that in the early pandemic phase, many underestimated the pressure that would be seen on capacity due to service disruptions.
Jensen noted that this subsequently became an even larger problem as capacity shortages worsened and rates continued to increase even further.
"This time around, it might be a little different," Jensen further said. "We have already hit the peak of disruptive impact. Vessels that needed extra-long detours to go around Africa have now completed those journeys."
The Vespucci Maritime CEO, writing for Baltic Exchange, added that the empty container shortfall that could be expected in China likely reached an apex in terms of magnitude already in mid-January.
"As such, the momentum for rates to spike even further on account of fear of worse to come has waned. This factor is less of an issue in the Pacific," he said, adding that the disruptions hit a much smaller amount of the total US imports, and an obvious way to circumvent the problem is to re-route cargo to USWC — in turn acting as a push upwards for rates there.
"The other element to keep in mind is that we are in the last week of the usual peak run-up to Chinese New Year," Jensen added.
The report noted that seasonally, rates are supposed to go up, and hence the positive momentum on the Pacific comes to some degree from this.
Jensen said in that context. It is more remarkable that the Asia-Europe rates are already flatlining — in itself another indication that the disruption of capacity is not as severe as feared.
"Most likely, we will see spot rates wane in the aftermath of the Chinese New Year," Jensen said. "Not back to pre-crisis levels at all but somewhat below where they are currently peaking."
He noted, however, that there will be an upward momentum on new contract rates as these now also need to reflect both the added cost of round-Africa services as well as the sudden strengthening of the supply/demand balance in favour of the carriers.
The analysis also noted that global schedule reliability dropped sharply in the measurement for December, as per Sea-Intelligence, down to 57%.
Baltic Exchange noted that likely this number will be revised further downwards as some vessels are so severely delayed that they had not even arrived yet at the time the data was collated.
"January will be worse still."
Jensen added: "But after that, we should see an improvement as the round-Africa services have stabilised. Transit times are obviously longer, but reliability will improve."
Commenting on the new Gemini Corporation — which is the new collaboration between Maersk and Hapag-Lloyd — which will only come into effect from February 2025, the Vespucci Maritime chief noted that it will have "no short- or medium-term impact on any shippers."
"However, as 2024 progresses, shippers will need to think through how they want to tackle contractual relations with the two carriers in cases where contracts extend into February 2025 and beyond," Jensen said.
