{"id":87224,"date":"2024-01-19T08:05:39","date_gmt":"2024-01-19T08:05:39","guid":{"rendered":"https:\/\/tin.happy-projects.ro\/red-sea-attacks-cause-shipping-rates-to-skyrocket\/"},"modified":"2025-09-19T09:01:24","modified_gmt":"2025-09-19T09:01:24","slug":"red-sea-attacks-cause-shipping-rates-to-skyrocket","status":"publish","type":"post","link":"https:\/\/www.timberindustrynews.com\/ro\/red-sea-attacks-cause-shipping-rates-to-skyrocket\/","title":{"rendered":"Red Sea attacks cause shipping rates to skyrocket"},"content":{"rendered":"

The Red Sea crisis has led to disruptions in passage, significantly increasing transit times for trade between Asia and Europe. At the same time, comprehensive transportation costs have skyrocketed. <\/span>Some shippers have reported that the quotes for shipping four containers from China to Morocco have increased by several hundred thousand yuan compared to early December last year. Freight forwarding companies have provided feedback that container prices, which were previously in the range of $2300-$2400, are now conservatively estimated to be around $6500.<\/p>\n

Amid the \"Black Swan\" events, some domestic foreign trade enterprises are grappling with logistical challenges, testing the resilience of industries.<\/p>\n

Shipping giants alter course<\/strong><\/p>\n

On January 5, local time, Maersk issued a statement, citing the continuously changing situation in the Red Sea, filled with ongoing instability. All available intelligence confirms that security risks continue to be significantly elevated. The shipping and logistics company announced, \"Therefore, we have decided that all Maersk vessels passing through the Red Sea and the Gulf of Aden will sail south, bypassing the Cape of Good Hope in the foreseeable future.\"<\/p>\n

Maersk emphasized that all decisions were made after careful consideration, with the top priority being the safety of the company's vessels, crew, and cargo. Despite the cargo delays resulting from the route changes, Maersk aims to bring more consistency and predictability to its customers by temporarily suspending Red Sea navigation.<\/p>\n

After opting for the Cape of Good Hope route, the Transit Disruption Surcharge (TDS), Peak Season Surcharge (PSS), and Emergency Congestion Surcharge (ECS) announced from January 1 remain in effect.<\/p>\n

Simultaneously, the German shipping company Hapag-Lloyd also announced its decision to continue circumnavigating the Cape of Good Hope due to safety concerns. Nils Haupt, Head of Corporate Communications for Hapag-Lloyd, stated on January 5, \"At the moment, we can say that we do not consider the passage through the Red Sea and the Suez Canal to be safe. We were attacked in December last year, and you can't imagine how difficult it was. In the past few days, there have been several more attacks, and as long as the waterway is not safe, we will not pass through.\"<\/p>\n

Continued surge in freight rates<\/strong><\/p>\n

As major shipping companies adjust their routes, resulting in extended transit times and reduced capacity, sea freight prices have surged significantly. Data shows that in the first week of 2024, the Shanghai Containerized Freight Index (SCFI) experienced a notable increase, rising by 137.07 points to 1896.65 points compared to the previous week, representing a weekly increase of 7.79%. The monthly increase is even more substantial at 83.75%.<\/p>\n

Some freight forwarders mentioned on January 5 that \"all the slots for early January have been filled.\" Quotations for late January are currently updated only by a few shipping companies. Industry insiders believe that, as the year-end approaches, many domestic foreign trade enterprises are eager to ship quickly to facilitate prompt payments. This may lead to a situation where \"finding a container is difficult.\"<\/p>\n

The freight forwarder stated, \"We have customers who want to ship from China to Italy, and now there are no good prices and slots. The Mediterranean routes are all full.\" Updated quotations show that freight rates in late January have risen again, with small containers increasing by around $600 and large containers rising by approximately $1000. The overall increase falls within the range of $500 to $1000.<\/p>\n

Specifically, the freight forwarder pointed out that freight rates for European routes in late January are around $3150\/TEU (small container) and $6050\/FEU (large container), roughly doubling compared to the prices at the end of December last year. Mediterranean route freight rates are around $4400\/TEU and $6250\/FEU, representing an increase of approximately 1.2 to 1.3 times compared to the prices at the end of December last year.<\/p>\n

According to market dynamics released by freight forwarding giant DHL Global Forwarding on January 3, it is expected that freight rates will remain high until mid-February against the backdrop of the continued tension in the Red Sea. For the China to Europe and Mediterranean routes in the first half of January, shipping companies have generally raised the basic port freight rates to $4500-$5000 per 40-foot equivalent unit (FEU) for Europe and $5000-$5500 per FEU for the Mediterranean West route.<\/p>\n

Disruption to production order<\/strong><\/p>\n

The cross-border industry's supply chain is interlinked, and any blockage in one link disrupts the smooth operation of both upstream and downstream processes. The Red Sea shipping crisis has caused some small and medium-sized foreign trade enterprises exporting products to Europe to once again experience the pains of logistical disruptions during the pandemic.<\/p>\n

With the overall increase in comprehensive logistics costs, both buyers and sellers have to bear the consequences. In one scenario, if the shipper and customer adopt a Free On Board (FOB) cooperation model, the increased shipping costs are generally borne by the customer. \"Customers bearing the increased freight costs also mean that their purchase volumes may decrease, and our order volume will also decrease,\" said the head of a building materials export company in Foshan, Guangdong. The rise in freight costs, combined with uncertainties in safety factors, has led some customers to hesitate about reducing order quantities.<\/p>\n

In another scenario, settling under the Cost, Insurance, and Freight (CIF) model means that the seller bears the logistics costs. Although the increased costs will eventually be passed on to the buyer in some way, for some small and medium-sized enterprises, there seems to be little room for negotiation. The head of a supply chain company in Shenzhen stated that for small and medium-sized enterprises using this settlement model, the rising freight costs will undoubtedly increase their pressure. \"The value of a box of goods may be only $10,000, and now the freight cost is $6,000 to $7,000. Products with low added value are difficult to bear.\"<\/p>\n

Industry insiders generally believe that if the crisis continues to escalate, and the \"ceasefire\" period remains uncertain, the increase in shipping costs and extended delivery periods may lead to two extreme situations for buyers: either due to the inability to shelf and sell goods on time, some European buyers may abandon or reduce demand; or due to the lack of a habit of stocking goods in advance, some European buyers may increase their procurement plans in the near term, leading to a short-term increase in demand. Regardless of which situation occurs, it will inevitably disrupt the normal production and shipping rhythm of enterprises to some extent.<\/p>\n

Pre-bookings for China-Europe rail routes<\/strong><\/p>\n

In terms of transportation methods and routes, some logistics industry insiders state that besides circumnavigating the Cape of Good Hope, some companies are choosing a combination of sea and air transportation. This involves shipping goods by sea to the Middle East and then transporting them by air to the final destination. Additionally, some customers with urgent shipping needs may opt for air transport or China-Europe rail services.<\/p>\n

According to publicly available information, pre-bookings for China-Europe rail routes have already been fully booked for January. Currently, all freight rail slots for January are booked, and the earliest booking service date on the SOFreight website for China-Europe rail routes is scheduled for January 31.<\/p>\n

The above-mentioned logistics industry insiders admit that choosing China-Europe rail services or air transport is mostly for goods with higher time requirements and added value. \"Generally, goods transported by sea are daily necessities, clothing, and low-value-added products. Although the quantity is large, the profit margin is thin, and it may be challenging to afford the costs of China-Europe rail services and air transportation.\" In addition, some industry insiders point out that the capacity of China-Europe rail services is limited and is not in the same order of magnitude as sea transportation.<\/p>\n

As demand grows, prices for China-Europe rail services are also rising, and it is expected that China-Europe rail service prices will continue to rise in line with the increase in sea freight costs.<\/p>","protected":false},"excerpt":{"rendered":"

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