Xeneta has warned that disruption linked to the Strait of Hormuz crisis is driving freight rates higher on major east-west trades and causing export delays across Asia.
According to the latest market update from Xeneta, spot rates from the Far East to the US West Coast and US East Coast have increased 127 per cent and 106 per cent respectively since the end of February, with further increases expected through June.
Peter Sand, Chief Analyst at Xeneta, said: “Spot rates remain elevated across major fronthaul trades with further increases expected mid-June as disruption from Middle East conflict continues to bite hard. From Far East to US West Coast and US East Coast, spot rates are up 127 per cent and 106 per cent respectively since pre-Strait of Hormuz crisis and could double again before peaking.”
Sand warned that rates could approach the highs seen during the Red Sea crisis in 2024, urging shippers to limit exposure to the spot market where possible.
Alongside rising costs, exporters are also facing growing challenges in securing vessel space.
Sand said: “Shippers are not only paying the price in freight rates, there are also delays exporting goods out of the Far East. Even large volume shippers with valid long term contracts are unable to move containers, with carriers stating services are fully booked into July.”
READ: Xeneta warns shippers as spot rates surge 80 per cent
Market average spot rates on 12 June stood at $4,258 per FEU from the Far East to the US West Coast, $5,462 per FEU to the US East Coast, $3,854 per FEU to North Europe and $5,194 per FEU to the Mediterranean.
While carriers have begun increasing capacity on major trades, Xeneta data shows growth remains limited compared with demand.
Capacity compared with pre-crisis levels is up just 1 per cent on services to both US coasts, 2 per cent to North Europe and down 7 per cent in the Mediterranean.
Sand questioned whether carriers had reacted quickly enough to rising demand: “Offered capacity is now starting to increase, but rates have already spiralled and containers are being rolled, so it is a case of too little, too late for shippers.”
He added that carriers may benefit from stronger freight rates in the short term but risk damaging long-term customer relationships.
“Carriers driving up freight rates and rolling containers risks damaging relationships with shippers who remember how they are treated during the tough times,” Sand said.
For more information:
Xeneta – https://www.xeneta.com/
