Impact of the Current Sea Freight Situation on Shipments from Asia
The situation in the Red Sea since December 2023 has led to a noticeable shortage of containers and vessel space from the Far East to Europe. The longer route in both directions via the Cape of Good Hope is preventing equipment from returning to Asia on time. Demand for containers and available capacity between Asia and Europe is beginning to resemble the peak of the pandemic, while the announced “blank sailings” may cause additional delays in transit times for cargo from Asia.
What are the consequences for sea freight?
1) The escalation of the Red Sea situation has led to a rapid reduction in available capacity and equipment.
2) Container lines have started introducing peak season surcharges for both long-term and short-term contracted rates. Various routes, including the Red Sea, Africa, the US and Latin America, reached levels in May of USD 6,000 or even USD 8,000 for 40’DC/HQ containers.
3) If tensions in the Red Sea and the threats by Houthi armed forces to expand into the Indian Ocean continue, ocean freight rates could reach USD 10,000 per 40’DC/HQ by July.
4) Demand for space is much higher than expected, and some shippers are prepared to pay an additional USD 1,000 per container as a shipping guarantee fee on top of the freight rate in order to secure capacity.
Our advice
Guaranteed capacity
In the current situation, we advise you to choose options with guaranteed capacity, as container prices continue to rise and are being adjusted approximately every 48 hours.
Long-term planning
Remember to take delays into account by planning ahead and placing your ocean freight bookings at least 3–4 weeks in advance.
Alternative transport
For urgent shipments, it is advisable to consider alternative modes of transport such as air or rail where possible.
With the current market instability and continued challenges with equipment and vessel space, the Unimasters team monitors the situation on a daily basis. Our goal is to keep you informed so that you receive the best possible solutions for your cargo. Our specialists are ready to answer any questions and assist with advice, consultation or a quotation at the following contacts:
E: ocean@unimasters.com | T: 0800 800 00 (toll-free)