Crisis at Red Sea and Delays at Panama Canal Continue to Impact Coffee Logistics; Maersk Rerouted Ships from Red Sea, Utilizing Railway in Panama CoffeeNetwork (New York) – In a new report, Sea-Intelligence highlighted that due to the Red Sea Crisis, transit times will clearly increase with the round of Africa routing. It will be a bit more than a week longer from Asia to North Europe, and up to two weeks longer into the Mediterranean. However, the report notes that while this is certainly a serious problem for many shippers, these disruptions are no way near to the ones caused during the pandemic.
Sea-Intelligence noted that the current capacity outlook is fraught with a high degree of uncertainty, however, the present data shows that the shippers could expect a capacity crunch for Asian exports in the coming weeks.
On Asia-North Europe, the impact is quite visible, due to a combination of some services being held back in departure from Asia in the short-term awaiting re-routing, and some services clearly arriving late into Asia, thereby causing a rapid shortfall in the middle weeks of January, with a steep capacity drop now expected for the week of January 22nd. The seeming capacity spike in late December/early January is more an artifact of origin delays and should be given less attention. A similar trend is seen on both Asia-Mediterranean and Asia-North America East Coast, but a week earlier.
Drewery, logistical analyst company, released data for their World Container Index for the week of January 11th, which showed prices increased by 15% to $3,072 per 40ft container this week. This is also a 44% jump when compared with the same week last year.
The latest Drewry WCI composite index of $3,072 per 40ft container is the highest since October 2022 and is 116% more than average 2019 (pre-pandemic) rates of $1,420.
The average composite index for the year-to-date is $2,871 per 40ft container, which is $196 higher than the 10-year average rate of $2,675 (which was inflated by the exceptional 2020-22 Covid period).
Freight rates on Shanghai to Genoa increased by 25% to $5,213 per feu. Followed by rates on Shanghai to Rotterdam which rose by 23% to $4,406 per 40ft box. Likewise, rates on Rotterdam to Shanghai elevated by 19% to $652 per 40ft container. Similarly, rates on Shanghai to New York increased by 8% to $4,170 per feu. Also, rates on Shanghai to Los Angeles increased by 2% to $2,790 per 40ft box. In the same way, rates on New York to Rotterdam and Rotterdam to New York surged by 1% to $599 and $1,513 per 40ft box respectively. Conversely rates on Los Angeles to Shanghai dropped by 1% to $766 per 40ft box. 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.
Additionally, despite the Panama Canal increasing the number of daily transits from 18 slots to 24 slots (still 33.33% lower than the 36 slots that are usually available), Maersk has decided that, based on current and projected water levels in Gatun Lake, and following a review of the trade route between Oceania and Americas, they will utilize the Panama Canal Railway to safeguard customers’ supply chains. This decision follows evaluation of the current schedule impact from the delays at the Australian East Coast ports coupled with the modifications to the booking process of the Panama Canal.
The vessels that utilized the Panama Canal before, will now use the existing Panama Canal Railway to transport containers across Panama.
Alexis Rubinstein
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