Have ocean freight shipping rates already peaked during the Red Sea crisis? Shippers have become increasingly suspicious of carriers seeking to keep rates elevated for as long as possible during the Red Sea crisis and the latest Xeneta data suggests they are now pushing back.
Data released today, Wednesday, indicates the average short term rates from Far East to Mediterranean are set to increase from the current level of USD 5750 per FEU to USD 5950 under February’s GRIs.
However, that rate, even if it sticks, is still below the peak of USD 6050 on 16 January
It is a similar situation on the trade from Far East to North Europe with rates expected to increase from today’s level of USD 4730 per FEU to USD 4820 at the start of February – again this is below the peak of USD 4850 on 16 January.
Peter Sand: Xeneta Chief Analyst, said: “Everyone is accusing everyone at the moment, which is normal during situations when there is so much uncertainty in the market.
“Ocean freight carriers did not invent this crisis and it takes time for them to put in new shipping networks to deal with the disruption caused by diverting away from the Suez Canal.
“However, you can also see this from the shippers’ perspective who may view the rate increases as carriers acting opportunistically to maximise the money they can make.”
While the situation remains volatile and subject to change, the newly-released data is the best indication of where the market is headed. This is demonstrated in the fact the February GRIs are below the level previously anticipated, suggesting carriers have been forced to negotiate down.
Emily Stausbøll, Xeneta Market Analyst, added: “Shippers have generally accepted the carriers’ argument that it takes time to react to such an unexpected crisis, but it now appears some shippers are pushing back and managing to agree lower rates. So, we may see rates begin to flatten or decline sooner than many anticipated in February.
“However, the market low – the cheapest rates shippers are paying – is set to increase from USD 2940 per FEU today to USD 4840 in February. With the bigger, large volume shippers tending to occupy the lower end of the market, this is good news for carriers and may even increase the amount of money they make overall.”