Spot freight rates are the leading indicator of the mounting repercussions from ongoing disruptions to the shipping industry due to security problems in the Red Sea. With the attacks continuing, nearly 20 major carriers have reported that they are rerouting vessels, adding to travel time and expense, which is quickly being reflected in the spot price for shipping, as well as the growing concerns of impacts to supply chains and a renewal of port congestion.
Analytics firm Drewry provided its first report of 2024 on its closely watched World Container Index and to no surprise rates have skyrocketed. In one week, Drewey calculates the composite index is up by two-thirds (61 percent) per 40-foot container and stands 25 percent above the end of 2022/start of 2023. The latest Drewry World Container Index composite is 88 percent higher than the 2019 average.
Predictability, the highest increases are on the routes most directly impacted, i.e. those using the Suez Canal. Freight rates from Shanghai to Rotterdam, for example, are up by 115 percent. The increases for shipping containers to the Mediterranean are also up more than 100 percent, while rates from Asia to North America are up a more modest 26 to 30 percent.
Read more in an article from The Maritime Executive.