In a seismic shift, carriers have chosen to avoid Red Sea routes, driving up rates and vacuuming up capacity in the global shipping industry. Even though ocean rates were in a steep decline, the conflict has given carriers a beaming light of hope. Rates, coupled with surcharges and capacity issues, will be increasing to obscene levels
Crowd-sourced freight rates platform Xeneta explains that avoiding the Suez Canal, coupled with the delays around the Cape of Good Hope, will escalate the problems. With Lunar New Year coming, shippers should be ready to make advanced bookings to ensure they find space and equipment. Sea Intelligence warns that exporters from Asia are on the brink of facing limited access to capacity in the coming weeks.
Scheduling issues on the alternate routes are starting in earnest as more ships take the roundabout path. In a situation almost too perfect to be natural, this will start a rapid capacity evaporation and become a slippery slope to future equipment imbalances and repositioning fees expected in the spring.
Despite contracts with lower ocean rates locked in, carriers will funnel people into the spot market, holding capacity for the higher spot slots. Recently introduced FAK rates are double and triple what most shippers expected at this point. For a market so recently in freefall, the numbers are robust.
According to recent data from Xeneta, since mid-December:
- Rates from the Far East to Northern Europe are up 124%
- Rates into the Mediterranean are up by 118%
- Rates from the Far East to the US East Coast are up by 45%
In this problematic environment, RS Express recommends consistent, clear communication and increased flexibility to weather the storm. Contact us today if you are ready for a logistics partner who stays informed to offer top-notch service for your cargo.