CONTAINER RENTAL MARKET WEEK 4/2024
The freight situation continues to fluctuate due to the impact of attacks in the Red Sea, especially on the Far East/Europe route. Although the price increases were temporary and only affected certain regions, the freight market quickly recovered and became a wave in the charter market. In the context of a shortage of spot vessels in the Post-Panamax group, operators are encouraging shipping lines to book tonnage for extended periods and even change ship owners to expand shipping capacity. Panamax and sub-Panamax vessels have undergone significant changes recently, with several transactions falling through.
Accurate pricing of ships from both sides becomes problematic when the market is growing strongly. The existence of charter boats, although beneficial to those in need, gives pause to consider the supply at its real value. The European transshipment market has seen active disruption due to the conflict in the Red Sea and increasing price differentials with the Asian market. While operators have been able to limit contract periods to six months or less, with the continued decline in spot vessel supply, there are signs that this is only temporary.
See more: Negative impact of the Red Sea Crisis on international shipping
INTERNATIONAL SHIPPING AND LOGISTICS MARKET WEEK 4/2024
Since the Red Sea crisis escalated in mid-December last year, the main focus has been shipping lanes from Asia to the Mediterranean, Northern Europe, and the US East Coast. However, as usual in the ocean freight sector, there are many other factors to consider. It’s no surprise that services are leading the way, moving goods from manufacturing hubs in Asia to consumers and businesses in Europe and the US. Another reason these direct transactions are notable because they were the first to show symptoms of the Red Sea crisis, with growth rates even faster than in the early months of the pandemic.
However, we should recognize shipments going in the opposite direction. While freight rates may be slower to react than their direct shipping counterparts, they are still notable, especially given the high volume of goods shipped on these routes. The accompanying chart shows the delayed response of freight rates to the Red Sea crisis on shipping routes from Northern Europe and the Mediterranean to the Far East, with spot rates spiking in New Year. Backhaul shipping from the US East Coast to the Far East has yet to respond to the Red Sea crisis over spot rates.
