Freight Market Update

Topic of the week:

There has been an increase in attacks across the shipping industry within the Red Sea Crisis, as the Houthi have suggested an expansion of their ‘danger area’ into the Arabian Sea. The UK Maritime Trade Operations (UKMTO) highlighted that there had been two more attacks on 7th April, after eight days of rest from attacks. The targeted vessel was not damaged after two missiles failed to hit it and the crew remain unharmed.

After a Houthi spokesperson stated on television that they had targeted the British vessel Hope Island, and two Israeli ships, MSC Grace and MSC Gina, there are fears that this means the Houthi have expanded their area of attack to the Arabian Sea. Despite these claims, there have not been any other reports to confirm these attacks. Lars Jensen stated, “If this is true, it would constitute an expansion of the risk area to the approach routes to the major container hubs on the south coast of Oman, as well as approach routes towards the Strait of Hormuz.”

Due to the effects of the Red Sea disruption, air freight rates within the Bangladesh region have risen. This, combined with repeated technological malfunctions with explosive-detection scanners (EDSs) have caused increased frustration for forwarders. Air cargo demand has increased alongside rates within the country, with outbound cargo being stored inside cargo villages. Limited capacity, delays, increased rates and now three out of four EDSs out of order at Dhaka Airport have piled on to forwarder’s frustrations. These malfunctions are causing additional, significant disruptions to shipments out of Dhaka Airport alongside equipment shortages. These technological issues can take a long time to repair, up to months, meaning that there could be more and more air cargo delays within the region for some time yet.

Sea:

• Over the last two weeks China/East Asia to North America West Coast spot rates have decreased by 11.6% from $3,727/FEU to $3,294/FEU according to Freightos data.
• China/East Asia to North America East Coast spot rates have fallen over the last two weeks, decreasing by 18.5% to $4,308/FEU.
• Global container spot prices have fallen over the last two weeks, and are now sitting at $2,461 /FEU, a 6.2% decrease over the last two weeks, but a 76% increase from spot rates this time in 2023 according to the Freightos Baltic Index (FBX)

Air:

• Global Air Freight spot rates currently sit at $2.48, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
• Europe to Northern America spot rates currently sit at $1.87 (100-3000kg), says FAX, decreasing by 9.2%
• Europe to Central Asia spot rates have decreased by 6.7% currently sitting at $2.08 (100-3000kg), says FAX
• Europe to Asia, Greater China spot rates currently sit at $1.36 (100-3000kg), says FAX
• Malysia Airlines have now added Maastricht Aachen Airport to their network offering a weekly cargo service to Dutch cargo airport.
• After four years of suspended service, Cathay Cargo have resumed their Ho Chi Minh City freighter service with the first flight on April 4^th Since December 2019. This will be a weekly service starting its journey from Hong Kong to Hanoi, and then moving to Ho Chi Minh City, returning to Hong Kong.

That’s all for this week’s update…

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