International shipping and logistics market update - Week 02/2024

International shipping and logistics market update - Week 02/2024

Drewry’s World Container Index for the week 02/2024 continued to increase by 15% compared to the previous week, to 3,072 USD. This price index increased 44% compared to the same week last year and was 116% higher than the 2019 average before the pandemic (1,420 USD).

Drewry’s World Container Index Week 02/2024 (Photo: Phaata | Source: Drewry)

1. Asia - Northern America route

The freight rate from Asia to North America West Coast in the week 02/2024 continued to increase to 2,439 USD/FEU, up 4.54% over the previous week and up 52.72% over the previous month, according to Xeneta data.

Prolonged drought is causing more restrictions on container ship traffic through the Panama Canal. There are 32 transits per day, down from the normal 36, and the canal is planning to gradually reduce that number weekly to an expected 18 per day before February 1. While container traffic has so far not been affected, further reductions will likely start to have an impact. Carriers are evaluating the possibility of adding more ships to Suez-bound routes. Alternative routes could be via the Suez Canal or via the U.S. West Coast by rail. Carriers are also implementing weight restrictions of 8 tons on average for containers moving through the canal. Traveling through Panama remains the fastest route to the U.S. East Coast.

Asia-US West Coast Freight rate | Week 02/2024 (Image: Phaata.com)

2. Asia - Northern Europe route:

The rate for container shipping from Asia to Northern Europe in the week 02/2024 continued to increase sharply to 3,741 USD/FEU, up 18.50% over the previous week and up 153.28% over the previous month, according to Xeneta data.

Spot freight rates in the first half of January increased sharply as the threat from the Red Sea forced most shipping lines to reroute ships from the Suez Canal to the Cape of Good Hope. This significantly increases shipping costs and is expected to increase total shipping time by 1-4 weeks depending on the vessel's destination. We predict that this increase in spot rates will not easily stop even after the Lunar New Year. The shortage of container equipment can also be seen as a direct impact on the potential for upcoming price increases. Due to all of the above combined factors, along with the growing gap between spot rates and long-term contract rates, bookings are further restricted by service providers. A significant peak season surcharge (PSS) is expected before Lunar New Year.

Mediterranean route: Similar to the Northern Europe route, the GRI on the Mediterranean route effective from early January is very high (same reason as the Northern Europe route) and it is expected that the Peak Season Surcharge (PSS) will be available soon deployed.

Asia-Northern Europe Freight rate | Week 02/2024 (Image: Phaata.com)

3. Northern America - Asia route:

The freight rates from North America (West Coast) to Asia in the week 02/2024 decreased by 7.99% compared to the previous week, down to 725 USD/FEU. This price decreased by 2.29% compared to the previous month.

Empty containers at many railway stations in the US mainland are lacking due to a lack of imports into the Midwest. Shippers should make reservations 2-3 weeks in advance to ensure they have container equipment for export plans.

Overall demand remains weak and is forecast to last until the end of the first quarter of 2024. Fierce competition is taking place among carriers. Freight rates continue to be offered by shipping companies at attractive rates to fill ships while capacity is still surplus.

US West Coast - Asia Freight rate | Week 02/2024 (Image: Phaata.com)

4. Northern Europe-Asia route:

The freight rate from Northern Europe to Asia in the week of 02/2024 continued to increase sharply by 23.61% compared to the previous week, to 534 USD/FEU. This price increased by 50% compared to last month.

Northern Europe - Asia Freight rate | Week 02/2024 (Image: Phaata.com)

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Read more:

• Is the Sudden Spike in Container Freight Rates an Overreaction to the Red Sea Diversions?
• Asia - Europe spot container freight rates increased more than 100% due to Red Sea terrorism
• OOCL's revenue fell sharply in 2023 despite container liftings growth
• ZIM Expands ZMP Service to Include Cai Mep Port in Vietnam
• International shipping and logistics market update - Week 01/2024

Source: Phaata.com 

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