The market has risen more than a year in two weeks, freight rates soared 143%, and global shipping is under pressure
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The situation between the United States and Iran continues to escalate, and the global shipping market is experiencing a new round of violent shocks.
The latest data released by the Shanghai Shipping Exchange on March 13 showed that,The Shanghai Export Container Freight Index (SCFI) has climbed to 1,710.35 points, rising for the third consecutive week, with a weekly increase of about 14%.Freight rates on the four major ocean routes have increased across the board. Among them, the Persian Gulf route has been directly affected by geopolitical conflicts.The single-week increase exceeded 40%, and the cumulative increase in half a month was as high as 143%.Become the focus of this round of soaring freight rates.
Persian Gulf routes are "available but not marketable", and alternative transportation costs increase sharply
According to the latest freight index, the freight rate per TEU on the route from Asia to the Persian Gulf has soared to US,220, an increase of US3 in a single week, an increase of 40.8%. However, behind this number is an embarrassing situation of "there is shipping but no market" - the vast majority of shipping companies have suspended receiving cargo from the Persian Gulf region, and the actual operable shipping capacity has shrunk significantly.
According to industry insiders, some goods already in transit were forced to be rerouted. After being unloaded at Indian ports, they were then transferred by land transportation or feeder ships to the ports of Khor Fakkan and Fujairah outside the Strait of Hormuz, and finally entered the markets of Arab countries. Although this "sea-land combined transportation" alternative can maintain logistics operations, the cost is much higher than conventional sea transportation.
European Mediterranean routes surge due to transfer order effect
The suspension of routes in the Persian Gulf is being transmitted to other regions through the route network. Affected by the transfer order effect, the spot freight rate on the Asia-Mediterranean route increased by approximately US0 this week, reaching approximately US,300 per 40-foot container, an increase of 12.9%; the freight rate on the European route also increased by more than 11%.
Some cargo originally bound for Egypt via the Red Sea has also begun to reroute to the Mediterranean route to enter the local market, further exacerbating the shortage of shipping capacity. CITIC Construction Investment’s research report pointed out that although the Strait of Hormuz only carries 3% of the world’s container trade demand, the complexity of the network of container shipping routes may trigger a chain reaction, leading to a decrease in efficiency and a loss of effective transportation capacity.
The performance of North American routes is divided, and the actual transaction price is lower than the market price
Compared with the popularity of Middle East routes, North American routes present a complex market structure.
Although SCFI data showed that the US West and US East routes increased by 15.9% and 14.5% respectively this week, many freight forwarding companies reported that the actual transaction price was still relatively weak.
Currently, the spot market price per 40-foot container on the U.S. west line is about 1,550 to 1,700 U.S. dollars, and the U.S. east line is about 2,400 to 2,500 U.S. dollars. Some shipping companies have postponed the price increase plan originally scheduled to be implemented on the 15th of this month for a week. The weakening market demand and the increase in freight rates caused by geopolitics have formed a subtle game.
The attack on the port of Fujairah adds another variable to the transshipment channel
As the market seeks alternative shipping options, key transshipment ports beyond the Strait of Hormuz are not immune.
On March 16, the oil facilities at the Port of Fujairah in the United Arab Emirates, located on the coast of the Gulf of Oman, were attacked by drones and caused a fire, forcing some operations at the port to be suspended. The port was attacked on the 14th and resumed operations on the 15th. Now it has been hit again.
As one of the few UAE ports located outside the Strait of Hormuz that can receive transshipment cargo, the operational status of Fujairah Port directly affects the stability of regional energy logistics. Once the port continues to be blocked, not only ship fuel supply will face challenges, but the already tense Middle East shipping chain may be further put under pressure.
Air freight prices rise simultaneously, congestion at European ports intensifies
The impact of geopolitical conflicts is spreading to the broader logistics field through multiple dimensions. Affected by the rise in aviation fuel prices caused by the escalation of the situation in the Middle East, many airlines have recently increased their fuel surcharges intensively. Cathay Pacific will increase the surcharges for short, medium and long-haul flights across the board from March 18, with long-haul flights rising from HK9 to HK,164, an increase of more than double.
At the same time, European port congestion is also increasing. Affected by the previous bad weather, the operational efficiency of the Port of Hamburg and the Port of Rotterdam decreased and the waiting time of ships was extended. The yard utilization rate at key ports such as Antwerp continues to be high, and the inland collection and distribution system is under pressure. The combination of these factors is driving the global supply chain pressure index to gradually rise.
Market Outlook: If the conflict continues, the chain reaction may be fully apparent
It is generally believed in the shipping industry that if the conflict in the Middle East lasts for more than a month, the global shipping market may once again experience a chain reaction similar to the "Red Sea Crisis" - problems such as ship deviations, tight shipping capacity, and container shortages will occur one after another.
Large shipping companies have notified customers that European routes plan to charge a comprehensive rate increase of up to US,000. It is expected that freight rates on European routes will continue to rise in the coming weeks. At the same time, in the context of continued tight capacity, North American routes may also usher in a new round of price adjustments in early April.
For cargo owners and freight forwarding companies, under the current situation, they need to pay close attention to the dynamics of the Middle East and changes in shipping company booking policies, reasonably evaluate transportation costs and timeliness risks, and make shipment arrangements and contingency plans in advance to cope with possible continued supply chain fluctuations.
