Ocean freight rates are surging after a missile attack and attempted hijacking of a ship operated by AP Moller-Maersk A/S over the weekend prompted carriers to suspend plans to restart transits through the Red Sea, a key artery to the vital Suez Canal trade route.
Yemen-based Houthi militants have been attacking high-value cargo vessels in the Red Sea since November last year in a show of support for Palestinian Islamist group Hamas fighting Israel in Gaza. It has forced ships to reroute around the southern tip of Africa, driving costs for vessels for the longer voyage, although rates are still far below COVID-19 pandemic levels reached in 2021.
Egypt’s Suez Canal connects the Red Sea to the Mediterranean Sea and is the fastest way to ship fuel, food and consumer goods from Asia and the Middle East to Europe. Shippers use the route to ferry as much as one-third of all global container cargo, including toys, tennis shoes, furniture and frozen food.
Rates for Asia to North Europe have more than doubled to more than US$4,000 per 40-foot container this week, with rates for Asia to the Mediterranean climbing to US$5,175, according to Freightos.com, a booking and payments platform for international freight.
Some carriers have announced rates above US$6,000 per 40-foot container for Mediterranean shipments starting mid-month, and surcharges of US$500 to as much as US$2,700 per container could make all-in prices even higher, Freightos research head Judah Levine said in an e-mail.
As of Wednesday, hundreds of container ships and other vessels have been rerouted around Africa’s southern Cape of Good Hope to avoid the attacks — adding anywhere from seven to 20 days to their voyages.
Those so-called, one-time “spot” rates are roughly double the rates for freight that moves on the contract market, logistics executives said.
“People desperate to get space [on ships] are going to pay,” Unique Logistics International Inc executive vice president Christian Sur said.
Rates to less-affected North American ports also are moving higher.
Up to 30 percent of cargo that arrives at the US east coast travels through the Suez Canal. Logistics executives expect some of those imports to be diverted to the US west coast — which is a straight shot across the Pacific Ocean from China and other Asian exporters.
Rates for shipments from Asia to North America’s east coast climbed 55 percent to US$3,900 per 40-foot container, while west coast prices jumped 63 percent to more than US$2,700 ahead of expected cargo diversions to avoid Red Sea-related issues, Levine said.
The news of an increase in freight rates boosted shipping stocks in Taipei trading yesterday. Among the stocks, Yang Ming Marine Transport Corp (陽明海運) rose 6.11 percent and Evergreen Marine Corp (長榮海運) gained 3.87 percent, while Wan Hai Lines Ltd (萬海航運) rose 3.64 percent, Taiwan Stock Exchange data showed.
Additional reporting by staff writer
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