- Linerlytica’s latest report on December 26 notes that during the seven-day closure of Suez traffic due to the Ever Given grounding in March 2021, fewer than 20 ships were diverted.
- The latest diverted ships represent 1.77 million TEU, raising concerns of a capacity crisis as delays of two to three weeks for ships returning to Asia from Europe and the US East Coast via Suez are anticipated.
- Most ships on the Asia-Europe and US East Coast via Suez routes maintain their revised Cape routing due to safety risks in the Red Sea, where Houthi rebels have been attacking vessels.
- Asia-North Europe rates surge nearly 46% to US$1,497/TEU, and Asia-Mediterranean rates rise by almost 31% to US$2,054/TEU, driven by peak season surcharges and higher freight-all-kinds (FAK) rates.
Ships Choose Cape Of Good Hope Over Suez
A record-breaking 125 ships have opted for the Cape of Good Hope route, surpassing the count during the Ever Given incident in March 2021, as an alternative to the Suez Canal.
Linerlytica’s latest report, issued on 26 December, stated that when Suez traffic was closed for seven days due to the Ever Given grounding, fewer than 20 ships were diverted.
The latest number of diverted ships equates to 1.77 million TEU, and Linerlytica cautioned that a capacity crisis could be looming as ships that were supposed to return to Asia from Europe and the US East Coast via the Suez are delayed by two to three weeks.
Shippers Maintain Cape Routing Amid Safety Concerns
The majority of ships on the Asia-Europe and US East Coast via Suez routes are retaining their revised Cape routing as of 25 December 2023, with carriers still assessing the safety risks of returning to the Red Sea route, where Houthi rebels have been attacking vessels.
Coinciding with the usual cargo rush before the Chinese New Year, which starts on 10 February 2024, the situation has filtered through to the freight market, resulting in the Shanghai Containerised Freight Index (SCFI) rising by 15% on 22 December.
Asia-North Europe rates gained nearly 46% week-on-week, to US$1,497/TEU, while Asia-Mediterranean rates increased by almost 31% to US$2,054/TEU, as liner operators are executing peak season surcharges and higher freight-all-kinds (FAK) rates.
Rate Surge Forecast For Asia-North Europe Routes
Linerlytica expects Asia-North Europe to transcend US$2,000/TEU this week with further rate hikes still to come as carriers take advantage of the looming space shortage in January.
Transpacific freight rates have latched on to the Red Sea turmoil and the expected shortage of capacity in January especially on the East Coast services which have been affected by the Panama Canal restrictions as well as the Suez diversions to the Cape route. Accordingly, Asia-US East Coast rates increased by 6% to US$2,982/FEU.
In comparison, Asia-US West Coast rates only went up by 2% to US$1,855/FEU.
Linerlytica explained: “Rates to the West Coast have not gained as much in comparison, with capacity still open on all corridors as existing capacity is not affected by the Suez diversions, although carriers could still shift some capacity to Europe on account of the looming space shortage.”
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Source: Container News
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