Container Costs Soar Amid Global Logistical ChallengesCoffeeNework (New York) – Drewery, logistical analyst company, released data for their World Container Index, which showed container prices jumped by 61% to $2,670 per 40-foot container this week. Overall, this has increased by 25% when compared with the same week last year.
The latest Drewry WCI composite index of $2,670 per 40ft container is now 88% more than average 2019 (pre-pandemic) rates of $1,420.
The average composite index for the year-to-date is $2,670 per 40ft container, which is $3 lower than the 10-year average rate of $2,673 (which was inflated by the exceptional 2020-22 Covid period).
Freight rates on Shanghai to Rotterdam skyrocketed by 115% or $1,910 to $3,577 per feu. Followed by rates on Shanghai to Genoa which rose by 114% or $2,222 to $4,178 per 40ft box. Likewise, rates on Shanghai to Los Angeles elevated by 30% or $626 to $2,726 per 40ft container. Similarly, rates on Shanghai to New York increased by 26% or $784 to $3,858 per feu. Also, rates on Rotterdam to Shanghai jumped by 17% or $80 to $546 per 40ft box. In the same way rates on Rotterdam to New York surged by 2% or $23 to $1,503 per box. While rates on Los Angeles to Shanghai and New York to Rotterdam remain stable. Drewry anticipates East-West spot rates to increase in the coming weeks, due to the Red Sea/Suez situation.
Last week, Maersk announced that it would pause all vessels bound for the Red Sea / Gulf of Aden in light of the recent incident involving Maersk Hangzhou and ongoing developments in the area.
All Maersk vessels due to transit the Red Sea / Gulf of Aden will be diverted south around the Cape of Good Hope for the foreseeable future.
“Diverting vessels around the Cape of Good Hope to mitigate the ongoing risks of sailing through the region is a necessary step in the interest of safety, but it has ultimately brought about increased costs for carriers,” the company said. As such, Maersk is invoking additional freight and costs of carriage as per their Transit Disruption Surcharge. In addition, due to severe operational disruption, Maersk is announcing a Peak Season Surcharge (PSS) and Emergency Contingency Surcharge (ECS) for all cargo on vessels affected by the disruptions around the Red Sea / Gulf of Aden remain in effect.
On the other side of the world, however, there is some good news. In December, the Panama Canal announced plans to finally increase daily transits starting this month. Previously, the Canal Authority had said only 18 slots will be allowed by February 2024, however, due to improved conditions and rising water levels, 24 slots are now available. While this is good news for those hoping to transit the canal, 24 slots per month are still 33.33% lower than the 36 slots that are usually available.
The month of October 2023 was the driest in history in the Canal Basin, therefore, anticipating the possibility of a worsening of the situation in November and December, the decision was made to progressively adjust the number of daily transits to 24 in November, 22 in December, 20 in January and 18 in February.
However, due to the fact that November's rains were not as deficient as October's, coupled with the results obtained through the water-saving measures and restrictions applied, they made the appropriate adjustments.
On the other hand, the Panama Canal will limit to one reservation quota per customer per date, with some exceptions, for quotas offered to vessels competing through the reservation system.
These measures allow most vessels that want to transit to have a better chance of obtaining a reservation.
Alexis Rubinstein
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