Spot container shipping rates soar 173% on Red Sea threats

The spot rate for shipping goods in a 40-foot container from Asia to northern Europe now tops $4,000, a 173% jump from just before the diversions started in mid-December, Freightos.com, a cargo booking and payment platform, said late Wednesday 3 Jan.

The cost for goods from Asia to the Mediterranean increased to $5,175, Freightos said, adding that some carriers have announced prices above $6,000 for this route starting in mid-January. Rates from Asia to North America’s East Coast have risen 55% to $3,900 for a 40-foot container.Shipping lines raise their prices when capacity is stretched, and add surcharges for the extra time it takes to deliver the goods and during busier-than-normal periods of the year.

The IMF called the Red Sea a “systemically important” shipping lane that handles more than 19,000 vessel transits a year. Reduced traffic has been observed since Dec. 16, the Washington-based institution said in the note.

For cargo owners seeing their freight costs rise, the risk is that spot rates will stay elevated and leave them with less leverage when they’re negotiating long-term contracts, which typically takes place between March and May. Most ocean freight moves on rates set in these contracts.

The impact goes beyond the container sector.Oil tanker markets have also seen some gains, shipbroker Braemar wrote in a research report, mostly for vessels hauling refined fuels like gasoline and diesel. Earnings for ships hauling refined fuels from the Mediterranean to Japan via the canal have climbed from about $8,000 a day in early December, to $26,000 this week.

“Any route involving the Red Sea is red hot,” the Braemar analysts said.