News / Carriers set to take advantage of 'market jitters' and increase rates

© Sergey Ilin

Freight rates across shipping lanes – particularly Asia-Europe – are set to surge, as market anxiety over the Middle East conflict and rocketing bunker prices override lacklustre cargo volumes. However, China has complained about rising prices, according to the FT.

On Friday, the Shanghai Containerised Freight Index showed the Asia-Europe rate gained 2% from the previous week, to $1,452 per teu, and $2,383 per 40ft.

Asia-Mediterranean rates were up 2% to $2,360 per teu, and up 5% per 40ft, to $3,238.

On the transpacific, Shanghai-US West Coast rates were up nearly 5%, to $1,940 per 40ft, while the Shanghai-US East Coast rate gained 1%, to $2,717 per 40ft.

Linerlytica’s report today says: “The sluggish market volumes at the beginning of March have not deterred carriers from announcing a further series of Asia-Europe rate hikes from mid-March, as they take advantage of market jitters over the Middle East conflict, oil price increase, and the delay in the resumption of Suez services.”

Shipping lines are planning to raise Asia-North Europe rates to $2,200 per teu and $4,000 per 40ft, while Asia-Mediterranean rates will rise to $4,200 per teu and $5,600 per 40ft.

Linerlytica noted there was a better chance of hiking Asia-Mediterranean rates, as the US/Israel-Iran conflict had caused Persian Gulf-bound cargo to be routed inland, through Turkey.

The FT noted: “China has called in executives from Europe’s two largest shipping companies to complain about extra freight charges and the suspension of services to the Middle East as the war in Iran disrupts trade. The transport ministry said in a brief statement on Tuesday it had summoned Danish shipping group Maersk and Switzerland-based Mediterranean Shipping Company for talks on their “international shipping operations” without elaborating.”

Separately, transpacific carriers have applied to the US Federal Maritime Commission to increase rates by between $2,000 and $3,000 per 40ft, amid negotiations over annual service contracts.

With the Strait of Hormuz still closed, the reduction in oil supply is set to drive up energy prices. The Middle East is a substantial fuel oil exporter, making up nearly 35% of the total imports into Singapore, the world’s largest bunkering port by sales volume. 

And as bunker prices – specifically for low-sulphur fuel oil – pass the $800 per tonne mark for the first time since 2022, the bunker adjustment factor is expected to add to freight costs.