- Early indications suggest ocean freight shipping rates are set to increase further in early February amid the ongoing Red Sea crisis.
- From the Far East to the Mediterranean, market average short-term rates are set to increase 11% by 2 February to stand at US$6507 per FEU.
- Rates from the Far East to North Europe are set to rise by 8% by 2 February, with a market average of US$5106 per FEU.
Ocean market analytics platform Xeneta has indicated that ocean freight shipping costs may rise further in early February as a result of the ongoing Red Sea crisis, reports Container News.
Freight rates to rise further
The Xeneta ocean freight rate benchmarking platform uses over 400 million crowdsourced data points, and the most recent prediction is based on prices previously received from clients for the first week in February. While the situation remains volatile and prone to change, Xeneta recently disclosed data provides an indicator of where the market is heading.
From the Far East to the Mediterranean, market average short-term prices are expected to rise 11 per cent by 2 February to $6,507 per FEU. This is a 243 per cent increase since the Red Sea situation peaked in mid-December.
According to Xeneta, rates from the Far East to North Europe are expected to grow by 8 per cent by 2 February, with a market average of $5,106 per FEU. This represents a 235 per cent gain since mid-December.
The largest increase in rates occurs from the Far East to the US East Coast. On this trade, the recently disclosed data reveals a 17 per cent rise by 2 February, bringing the average short-term pricing to $6,119 per FEU. This is a 146 per cent rise from mid-December.
Peter Sand, Xeneta Chief Analyst, said: “Carriers are trying to readjust services to make up for the additional sailing time around the Cape of Good Hope. For example, they are cutting journeys short, missing port calls and increasing sailing speed. However, despite this, the early data from Xeneta suggests rates will continue to rise as we head into February.”
While the market is set to rise further, there are early signs of factors which could see rates begin to fall again following the Lunar New Year peak, according to the firm.
Sand added: “The Red Sea crisis is causing a capacity issue rather than a demand issue, as we saw during the pandemic. It is the massive uncertainty in the market which has brought imbalance and instability. During times like this you can only keep your cool if you are well informed.”
“We are hearing from Xeneta customers that carriers are now no longer offering the most expensive premium services which guarantee freight will be shipped during periods of extreme pressure on available capacity.”
He further said, “This may suggest there is a waning demand for this level of service because the urgency is fading from the shipper side, or perhaps it is because capacity is available after all, despite the chaos caused by carriers pausing transits through the Suez Canal.”
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe!
Source: Container News
