Egypt claims Houthi attacks have cost its economy $6bn in lost Suez revenue
Egypt has suffered a $6bn hit from the Red Sea crisis and drop in Suez ...
ATSG: TAKE-PRIVATE DEAL CONFIRMEDF: EV PAINXPO: ARCBEST READ-ACROSSDHL: TRADING UPDATE NEXTBA: MAKING MONEY ISN'T EASY MAERSK: SMELL THE BEARGXO: ON THE RADARDHL: PIACENZA HEISTATSG: TAKEOVER TALKXOM: INCOME PLAYSTLA: BOUNCING FROM LOWSCHRW: A SLEW OF UPGRADES MAERSK: MOMENTUMAAPL: BOOOOMMMAMZN: CONF CALL TRANSCRIPT SCREENING ZIM: MAERSK BOOST DHL: SHRUGGING OFF CYBER TROUBLE SO FARGXO: WINCANTON RISK HEIGHTENSGXO: REMARKS THAT WERE NOT LIKED
ATSG: TAKE-PRIVATE DEAL CONFIRMEDF: EV PAINXPO: ARCBEST READ-ACROSSDHL: TRADING UPDATE NEXTBA: MAKING MONEY ISN'T EASY MAERSK: SMELL THE BEARGXO: ON THE RADARDHL: PIACENZA HEISTATSG: TAKEOVER TALKXOM: INCOME PLAYSTLA: BOUNCING FROM LOWSCHRW: A SLEW OF UPGRADES MAERSK: MOMENTUMAAPL: BOOOOMMMAMZN: CONF CALL TRANSCRIPT SCREENING ZIM: MAERSK BOOST DHL: SHRUGGING OFF CYBER TROUBLE SO FARGXO: WINCANTON RISK HEIGHTENSGXO: REMARKS THAT WERE NOT LIKED
Container spot rates from Asia to Europe have been falling again this week, while rates on the transpacific are beginning to ease, but for both tradelanes spot rates remain significantly elevated.
After a loss-making fourth quarter of 2023 ocean carriers have moved back into the black this year as a result of the huge spikes in rates and surcharges they succeeded in implementing due to the Red Sea crisis supply chain disruptions.
It remains to be seen whether the lines can hold onto these gains, against a background of a chronic capacity oversupply, as carrier networks and equipment balances settle down to the longer transits around the Cape of Good Hope.
“We’re definitely noticing a consistent decrease in rates almost every day. Surprisingly, the usual pre-Chinese New Year (CNY) demand seems to be lacking this year,” said Ian Bellis, a UK-based furniture importer and retailer.
However, Mr Bellis told The Loadstar that many bulk item importers had been forced to dramatically scale back their production because of the incessant rate rises, and the uncertainty of where they would plateau.
Mr Bellis said that he anticipated further rate drops after CNY and that his supply chain had started to normalise.
“Fortunately, we haven’t encountered any equipment shortages, and our containers are smoothly getting loaded onto vessels without any issues. It appears that the current route around Africa has become more routine now,” said Mr Bellis.
And Vespucci Maritime’s Lars Jensen echoed that view, suggesting that the peak of the Red Sea disruption had already been reached.
“Vessels that needed extra-long detours to go around Africa have now completed those journeys. The empty container shortfall that could be expected in China likely reached an apex in terms of magnitude already in mid-January. As such the momentum for rates to spike even further on account of fear of worse to come has waned,” said Mr Jensen.
Xeneta’s XSI Asia – North Europe component recorded a 2% week-on-week decline for an average of $4,733 per 40 ft, while Drewry’s WCI reading for Asia to the Mediterranean fell by 8% for an average rate of $5,848 per 40 ft.
Elsewhere, on the transpacific, the WCI Asia – US west coast spot inched up 2% for an average of $4,421 per 40 ft, while the US east coast reading was unchanged at an average of $6,165 per 40 ft.
According to the WCI, this week’s spot rates for the US west coast are 115% higher than a year ago, and for US east coast ports they are 91% ahead, which could influence negotiations for the looming transpacific contract season.
Mr Jensen said that he expects that spot rates will decline after CNY “but not back to pre-crisis levels”.
“There will be an upwards momentum on new contract rates as these now also need to reflect both the added cost of round-Africa services as well as the sudden strengthening of the supply / demand balance in favour of the carriers,” said Mr Jensen.
Meanwhile, on the transatlantic, attempts by carriers to push up rates on the route appear to have failed, with Xeneta’s XSI spot flat this week at a sub-economic average of $1,448 per 40 ft.
Comment on this article
Marcus Horner
February 03, 2024 at 10:35 amI remember reading some years ago that sailing around Africa was actually lower cost than through Suez due to the price of Suez transit vs fuel and labour on a longer route. Oil prices are higher now, but have you done the maths on whether the cost is actually higher?
Mike Wackett
February 05, 2024 at 1:07 pmHi Marcus – my back of a cigarette packet calculations:
The Suez toll for a fully-loaded 24,000 teu vessel, around $800,000.
Against 10 days @ 150 ton x $500 = $750,000.
So not much in it – but 2 more ships needed per loop.