The result of this volatile situation is that the transport cost is now passed directly to the consumer.
At the same time, weak demand and excess capacity continue to exert pressure on the freight market.
The rise in freight rates is mainly attributed to higher charges on Asia-USA and Asia-Europe routes, where the international container freight index Drewry World Container Index (WCI) recorded an increase of 3% to 2,286 dollars per 40-foot container, after three consecutive weekly declines.
Spot market freight rates from Shanghai to Rotterdam increased by 2% to 2,170 dollars per 40-foot container, while those to Genoa saw a slight increase of 1% to 3,075 dollars per 40-foot container.
Freight rates from Shanghai to New York also increased by 7% to 3,721 dollars per 40-foot container, while on the Shanghai-Los Angeles route an increase of 5% was recorded, to 3,062 dollars per 40-foot container.
It is noted that liners proceeded with increases in container freight surcharges from the beginning of May, a move followed by other carriers, as the energy cost for shipping companies is increasing rapidly due to the crisis in the Persian Gulf and the effective blockade of the Strait of Hormuz since the end of February.
MSC increased the so-called Emergency Fuel Surcharges (EFS) on the Asia-US East Coast (USEC) route from 430 to 644 dollars per 40-foot container and on the Asia-US West Coast (USWC) route from 272 to 467 dollars.
Characteristic, moreover, is the intervention on BBC News by the CEO of Maersk, Vincent Clerc, who warned that even if the Strait of Hormuz reopens, normalization in global cargo transport will not come immediately.
“The reopening of the Strait of Hormuz, whether it happens in the coming days or the coming months, will have a limited impact on commodity flows,” he stated, essentially explaining that the crisis has already caused serious disruptions to the supply chain, energy costs, and the planning of shipping companies.
He himself revealed that the company’s fuel costs have nearly doubled since the start of the crisis, burdening Maersk by up to 500 million dollars per month, a cost which – as he said – is now passed on to customers, through higher freight rates.
At the same time, Vincent Clerc left open the possibility of reusing the American operation “Project Freedom” for the safe removal of ships from the Persian Gulf, in case the plan is restarted.
As Maersk reported, it was initially negative towards the passage of ships through the area, however it changed its stance after contacts with the US Navy.
It is noted, however, that weak demand and excess capacity continue to exert pressure on the container freight market.
New FAK (Freight All Kinds) base freight rates – regardless of cargo type – for routes from Asia to Northern Europe and the Mediterranean, effective from May 15, were announced by CMA CGM, Hapag-Lloyd and MSC.
The new FAK base freight rates are set between 3,500 and 4,500 dollars per 40-foot container for the Asia-Northern Europe route and between 4,500 and 4,600 dollars for the Asia-Mediterranean route.
However, according to Drewry, implementing freight rate increases remains difficult due to weak demand and high availability of containerships.
Carriers continue to cancel scheduled sailings to support the market.
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