Carriers may secure only part of their November rate increases as Suez returns, Sogese report says
Freight rates to Europe have rebounded since early October after falling steadily from their July peak, but the conditions behind the rebound are mixed. Cargo demand is positive, with Far East to Europe volumes up 12.2% in the first seven months of the year, according to Xeneta. Ships, however, are arriving late, and the return ...
The story of November ocean freight rates is being shaped by the return of the Suez Canal route, according to the latest report from Sogese. While freight rates to Europe have rebounded since early October, the actual impact on prices is still uncertain. Cargo demand has been strong, with volumes from the Far East to Europe up 12.2% in the first seven months of the year, but ships are arriving late and Suez routings are releasing capacity faster than schedules can recover.
Sogese sees the market moving from a disruption premium to a capacity-management test, where the announced carrier rates and the actual rates shippers pay are drifting apart. For Italian importers and exporters, the cost of delay and choosing the wrong route can be more significant than the headline ocean rate.
Carriers are testing prices, with Drewry's World Container Index reaching its highest level in 15 weeks at $4,585 per 40ft on November 22. However, this has since fallen to $4,389 by November 5, 4.3% below the peak. Major carriers such as MSC and CMA CGM have filed rates that are below these levels, indicating that the increased capacity may not be raising prices as expected.
One of the main factors behind this situation is the return of the Suez route. The weekly container capacity through the Suez Canal has dropped from 1,457,000 TEU in the same period of 2023 to 753,000 TEU in the first two weeks of October. Major routes such as Shanghai to Rotterdam and Shanghai to Genoa have seen increases in premiums, with Genoa now commanding a higher premium than Rotterdam.
The delay in delivering goods is also a significant cost factor, with only 4% of Far East to Europe arrivals on time in September, with an average delay of 9.9 days. This delay can have a more significant impact on stock, production, and customer commitments than a few hundred dollars per container.
Italian gateways are also diverging, with Shanghai to Genoa gaining 12.7% between October and November, compared to a 8.3% gain for Rotterdam. The Genoa premium over Rotterdam has also widened, from $359 to $551 per 40ft. This difference is not just due to the ocean rate but also includes inland links, rail movements, and energy and inventory costs.
Written by urgent.news from Hellenic Shipping News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.