Data from Xeneta indicates that average spot rates from the Far East to the US West Coast are expected to increase by 4.8%, reaching USD 6,178 per 40ft equivalent container (FEU). This is a more modest rise compared to the 20% increase on the same route earlier in the month. Similarly, rates from the Far East to the US East Coast are projected to rise by 3.9% to USD 7,114 per FEU, a smaller jump than the 15% increase seen on June 1st.
Although these increases are less dramatic than previous ones, they still pose challenges for shippers, some of whom might struggle to ship containers under existing long-term contracts.
Rates from the Far East to North Europe are set to climb by 10% on June 15th, reaching USD 6,357 per FEU. Meanwhile, rates from the Far East to the Mediterranean are expected to rise by 7.2%, hitting USD 7,048 per FEU.
Peter Sand, Xeneta’s Chief Analyst, notes that the market remains challenging due to ongoing conflict in the Red Sea region, port congestion, equipment shortages, and potential labor issues at US ports.
“With the conflict in the Red Sea region, congestion at ports in the Mediterranean and Asia, equipment shortages, and shippers frontloading imports ahead of the Q3 peak season, the pressure within the ocean freight container shipping system remains severe,” Sand stated.
He also highlighted the potential impact of rising spot rates on inflation in the US and Europe if these costs are passed on to consumers. Since mid-December, average spot rates from the Far East have surged by 276% to the US West Coast and by 316% to North Europe due to the conflict in the Red Sea. However, Sand cautioned that accurately predicting the market is difficult given the many factors at play, including potential ceasefires and union actions at US ports.
“At present, it seems unlikely – but not impossible – that spot rates will reach the levels seen during the Covid-19 pandemic. However, with so many factors in play, it is impossible to predict the market with any certainty,” Sand concluded.