Sea freight rates rose after a missile attack and attempted detention on a Maersk ship over the weekend, prompting shipping companies to suspend plans to resume crossings of the Red Sea, a main artery leading to the Suez Canal.
Since last November, the Yemeni Houthi group has launched attacks with drones and missiles on high-value cargo ships passing through the Red Sea towards Israel, confirming its intention to put pressure on Israel because of its aggression against the Gaza Strip.
The attacks forced ships to change course around the southern tip of Africa, raising the costs of this longer journey, but prices are still well below the levels they reached in 2021 during the Covid-19 pandemic.
The Egyptian Suez Canal connects the Red Sea to the Mediterranean, and is the fastest way to ship fuel, food and consumer goods from Asia and the Middle East to Europe. Shipping companies use this route to transport one-third of the total global container shipments, which transport goods such as toys, shoes, furniture and frozen food.
The attacks have already led to delays in the delivery of products destined for many companies, as companies such as Walmart, IKEA, and Amazon use the Suez Canal route.
Price details
According to the international shipping booking and payment platform (Fretos), shipping prices from Asia to Northern Europe more than doubled, exceeding $4,000 per 12-meter container this week, and prices from Asia to the Mediterranean increased to $5,175.
Some shipping companies have announced rates of more than $6,000 per 12-meter container for Mediterranean shipments starting mid-month, and surcharges of between $500 and $2,700 per container could push prices higher, Judah Levine, head of research at Fritos, said. Overall even higher.
As of Wednesday, hundreds of container ships and other vessels had been rerouted to take the Cape of Good Hope route in South Africa to avoid attacks, adding between a week and 20 days to their journeys.
Logistics executives said so-called one-time “spot” rates are roughly twice the freight rates that move in the contract market.
“Those who are desperate for space (on ships) will pay,” said Christian Suhr, executive vice president of ocean freight at Unique Logistics.
Shipping rates to North American ports less affected by the order are also rising.
About 30% of the goods arriving on the East Coast of the United States pass through the Suez Canal.
Below standard levels
- Logistics executives expect some of these imports to be diverted to the US West Coast, a direct trans-Pacific destination from China and other Asian exporters.
Prices for shipments from Asia to the east coast of North America rose by 55%, reaching $3,900 per 12-meter container.
Levin said that prices for the West Coast jumped 63%, exceeding $2,700, before the expected rerouting of goods to avoid problems related to the Red Sea.
Despite the rise in prices, they are still far below the record levels resulting from the pandemic in 2021, which amounted to $14,000 per 12-meter container heading from Asia to northern Europe and the Mediterranean, and $22,000 from Asia to the east coast of North America.
