Due to the Houthi rebels’ ongoing attacks, the Red Sea—a crucial route for East-West trade—is experiencing unparalleled volatility. This has resulted in higher fuel and insurance prices, lengthier trips, and capacity soak-up for the transportation and logistics industry.
As the Red Sea situation worsens and affects the environment of international marine trade, Container xChange, an online platform for container logistics that facilitates leasing and trading of containers, publishes an important advise.
The Houthi rebels have continued to strike the Red Sea in recent times; the latest significant offensive was conducted on January 9, 2024, suggesting that the marine commerce in the Red Sea is still at risk.
In the past 30 days, container trading spot rates in Latin America East have increased by 48% (as of January 11, 2024).
The regions with the biggest increases in container trading spot rates over the past 30 days are Europe/Middle East, Japan & Korea, and Latin America (both East and West).
“In the medium to long term, we anticipate that the rate increases will level off. According to Roeloffs, “We have enough capacity that can be used up in longer transit times without creating a persistent capacity crunch.”
Container Demand Soars
As shippers and forwarders anticipate cargo demand in the upcoming weeks to fulfill orders ahead of the Chinese New Year, there is a growing demand for containers throughout Asia. Shipping companies are requesting more containers these days as they steer clear of the Red Sea, a Chinese container manufacturer told Container xChange.
Thus, in the past two months, shipping and leasing businesses have ordered about 750,000 TEU ISO containers from China.
On the Container xChange platform, spot rates for container trade are rising at an astounding rate in the meantime. The following graphics show spot prices in Shanghai, Hamburg, and Boston, providing instances of the sharp rise in box demand that these areas are currently experiencing.
The index value mirrored the considerable influence Red Sea attacks have had on pricing thus far, peaking at 71 in January from an average of 27 in December.
Photo by Rinson Chory on Unsplash
