The Red Sea crisis sent ocean freight rates from the Far East to the US spiralling by more than 150%, but there appears to be some relief on the horizon for shippers, says an article published on container news website.
Summary
- The Red Sea crisis has caused a significant spike in ocean freight rates from the Far East to the US, with rates increasing by over 150%. However, recent data suggests that the peak may have been reached.
- Xeneta’s latest data indicates a slight decline in spot rates from the Far East to the US since the implementation of General Rate Increases (GRIs) in early February.
- Early indications from Xeneta suggest a further softening of the market in the next 10 days, offering potential relief to importers. Despite this, spot rates remain significantly elevated.
- The TPM24 industry summit in Long Beach, California, scheduled for early March, will kick off negotiations between ocean freight carriers and US shippers for new contracts.
Current Situation
The Red Sea crisis has caused a significant spike in ocean freight rates from the Far East to the US, with rates increasing by over 150%. However, recent data suggests that the peak may have been reached, offering some relief to shippers.
Rate Decline Indicators
Xeneta’s latest data indicates a slight decline in spot rates from the Far East to the US since the implementation of General Rate Increases (GRIs) in early February. Rates into the US East Coast have fallen from USD$6260 per FEU to US$6100, while rates on the West Coast have decreased from US$4730 per FEU to US$4680 in the same period.
Market Softening Predictions
Early indications from Xeneta suggest a further softening of the market in the next 10 days, offering potential relief to importers. Despite this, spot rates remain significantly elevated, with rates into the US East Coast up by 145% compared to December 14th and rates into the US West Coast up by 185%.
Upcoming Negotiations
The TPM24 industry summit in Long Beach, California, scheduled for early March, will kick off negotiations between ocean freight carriers and US shippers for new contracts. The next few weeks are crucial for the market, with carriers aiming to maintain elevated rates for negotiations.
Challenges And Opportunities
While carriers may seek to keep rates high, Xeneta data suggests this may prove difficult, with further rate decreases anticipated. The ending of Lunar New Year celebrations could lead to increased volumes from the Far East, potentially impacting rates. The upcoming weeks will define the fortunes of ocean freight carriers and shippers for the remainder of 2024.
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Source: container news
