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Shipping Container rates spark global trade chatter at $10,000
PORTS & SHIPPING

Shipping Container rates spark global trade chatter at $10,000

Companies moving goods from Asia could face costs of up to $10,000 for an urgent full-size shipping container over the next month, which is roughly double the current spot rates.

It was reported by Marseille, France-based CMA CGM SA, the world?s No. 3 carrier, that a rate of $7,000 has been set for a 40-foot container for the second half of June for goods being shipped to northern Europe from Asia. This marks an increase from the current charge of approximately $5,000. Rates for the first half of June vary from $6,000 to $6,500, with premium service being offered at $7,500 to $10,000.

The container shipping industry finds itself in a scramble to meet demand that has been increasing in the US and Europe, largely due to capacity being stretched thin by more than five months of attacks on vessels in the Red Sea. Additionally, another factor contributing to the rise in prices is the increased ordering by importers, driven by concerns about potential disruptions such as port congestion, labor strikes, and higher tariffs on Chinese-made goods.

Trine Nielsen, senior director and head of ocean EMEA at Flexport Inc., a logistics technology company based in San Francisco, remarked that companies are altering their stock strategies and adjusting to longer lead times, resulting in shifts in normal shipping patterns. Some companies are even resorting to double-booking or increasing booking numbers to secure space, further complicating the situation.

According to Freightos data compiled by Bloomberg, in September 2021, spot rates for 40-foot containers to the US West Coast from China skyrocketed to over $20,000 due to a surge in demand related to the pandemic. Four months later, the rate for shipments from China to Europe reached nearly $15,000.

The CEO of Hamburg, Germany-based Hapag-Lloyd AG, the world?s No. 5 container carrier, attributed the recent spike in rates to the capacity issues in the Red Sea and the robust demand, which he believes supports the argument for an early peak season and inventory restocking.

While the duration of the surge in short-term container rates remains uncertain, Rolf Habben Jansen, the CEO, mentioned in an interview on Bloomberg Television on Wednesday that it could persist for another couple of months if the situation in the Red Sea does not improve.

Companies moving goods from Asia could face costs of up to $10,000 for an urgent full-size shipping container over the next month, which is roughly double the current spot rates. It was reported by Marseille, France-based CMA CGM SA, the world?s No. 3 carrier, that a rate of $7,000 has been set for a 40-foot container for the second half of June for goods being shipped to northern Europe from Asia. This marks an increase from the current charge of approximately $5,000. Rates for the first half of June vary from $6,000 to $6,500, with premium service being offered at $7,500 to $10,000. The container shipping industry finds itself in a scramble to meet demand that has been increasing in the US and Europe, largely due to capacity being stretched thin by more than five months of attacks on vessels in the Red Sea. Additionally, another factor contributing to the rise in prices is the increased ordering by importers, driven by concerns about potential disruptions such as port congestion, labor strikes, and higher tariffs on Chinese-made goods. Trine Nielsen, senior director and head of ocean EMEA at Flexport Inc., a logistics technology company based in San Francisco, remarked that companies are altering their stock strategies and adjusting to longer lead times, resulting in shifts in normal shipping patterns. Some companies are even resorting to double-booking or increasing booking numbers to secure space, further complicating the situation. According to Freightos data compiled by Bloomberg, in September 2021, spot rates for 40-foot containers to the US West Coast from China skyrocketed to over $20,000 due to a surge in demand related to the pandemic. Four months later, the rate for shipments from China to Europe reached nearly $15,000. The CEO of Hamburg, Germany-based Hapag-Lloyd AG, the world?s No. 5 container carrier, attributed the recent spike in rates to the capacity issues in the Red Sea and the robust demand, which he believes supports the argument for an early peak season and inventory restocking. While the duration of the surge in short-term container rates remains uncertain, Rolf Habben Jansen, the CEO, mentioned in an interview on Bloomberg Television on Wednesday that it could persist for another couple of months if the situation in the Red Sea does not improve.

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