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New Data Shows Significant Rise in Ocean Freight Rates Since May
According to Freightos, ocean freight rates have increased by around $1,000 per 40-foot-equivalent units (FEU) since the end of April, climbing to $4,000/FEU for routes to the U.S. West Coast and Northern Europe, as well as $5,000 to the Mediterranean and $5,400/FEU to the East Coast. The rise is attributed to ongoing issues in the Red Sea, where Houthi rebel attacks on vessels have forced carriers to reroute ships thousands of miles around Africa's Cape of Good Hope, leading to tighter capacity on the larger shipping network.
On the other hand, air freight rates have dipped in several regions, with China to North America prices dropping 4%, China to Northern Europe prices dipping by 7%, and Northern Europe to North America prices falling by 2%. However, rates out of the Middle East and Southeast Asia have remained elevated amid high demand from shippers who have shifted to air freight rather than opting for the lengthy diversion away from the Red Sea.
Maersk, the world's second largest ocean carrier, warned on May 6 that the risk zone in the Red Sea has expanded, projecting an industry-wide capacity loss of 15-20% for the Far East to North Europe and the Mediterranean market by the end of Q2 of 2024. The company expects disruptions from the crisis to persist through most of the year.
