Disruptions to shipping at the Suez Canal
16.05.2025
Sea freight rates explode
16.05.2025
Far East spot rates rise sharply
The situation in the Bab al-Mandab – the strait between the Red Sea and the Arabian Sea – remains risky for shipping despite the US-led naval operation against the Houthi rebels’ attacks. The extreme uncertainty is leading to price spikes in the freight market.
January 2, 2024 | by DVZ Editorial Team
The tense situation in the Red Sea is causing extreme uncertainty and price spikes in the freight market. The Shanghai Index (SCFI), which tracks container spot rates in 13 trade areas out of China, shot up by 40 percent to around 1,759 points in the last week of the old year. This was one of the strongest increases since the Shanghai Shipping Exchange introduced the rate barometer more than 14 years ago. The index thus reached its highest value since October 2022.
The largest fluctuations occurred on the routes from the Far East to Northwest Europe and the Mediterranean. Index spot rates for shipments from Shanghai to these regions rose by around 80 percent and 70 percent, respectively, to USD 2,694/TEU (Northern Europe) and USD 3,491/TEU (Mediterranean). Capacity constraints due to the rerouting of ships around the southern tip of Africa are becoming apparent first on these routes.
