Table of contents
Topic of the week:
As the Red Sea Crisis continues there are clear signs of its affects on the air freight market as well as cargo insurances. Since the Houthi attacks began war-risk insurance premiums have increased by 900% according to the latest United Nations Conference on Trade and Development (UNCTAD) report. The UNCTAD report showed evidence of some war-risk premiums increasing from 0.1% of the value of a vessel from the end of 2023, to up to 1% in recent weeks. This is just one of the many knock on affects of the Red Sea Crisis as Suez Canal journeys have fallen by 42% and Panama Canal vessel routes have dropped by 49%. Re-routing has led to a fall in total trade volume across many regions including the USA, Chile, Peru etc. Due to the inflation caused, costs of goods have increased, as well as fuel consumption, container and transportation costs have all seen a spike.
Meanwhile, the direct impact of the Red Sea Crisis on the air freight market has been highlighted in the latest WorldACD figures. The latest report has shown an increase in sea-air volumes especially in Dubai, Colombo and Bangkok, whose tonnages to Europe all saw an increase in over 50%, reaching up to 71%, year on year within the first weeks of 2024. Whilst some of this increased tonnage can be attributed to other factors such as the Lunar New Year, which typically expect a spike in demand for ex-Asia Pacific shipments, there has been a clear increase in demand, higher than normal that forced Dubai and Bangkok handlers to implement a temporary embargo. However, since the Lunar New Year, global volumes have shown signs of slowing down. Despite this, currently “Dubai-Europe gains have almost tripled in week seven (February 12 to 18) to +161%,year on year, while the previous three weeks stood at +89%, +93% and +77%. Colombo-Europe volumes in week 7 were more than double (+112%) the levels of week seven in 2023,” said WorldACD.
Sea:
- Over the last two weeks China/East Asia to North America West Coast spot rates have decreased by 1.1% from $4,859/FEU to $4,809/FEU according to Freightos data.
- China/East Asia to North America East Coast spot rates have risen over the last two weeks, increasing by 1.2% to $6,708/FEU.
- Global container spot prices have risen over the last two weeks, and are now sitting at $3,351/FEU, a 1.2% decrease over the last two weeks, and a 69% increase from spot rates this time in 2023 according to the Freightos Baltic Index (FBX)
- As the development of sustainable fuel options continues, signs of encouragement are shown as the cost of green hydrogen fuel has decreased at the port of Rotterdam to levels below the cost of grey hydrogen fuel. This is a positive signal for newer build vessels and the development of greener fueling alternatives for the shipping industry.
- After a barge hit Lixinsha bridge, causing it to collapse, there are forecasted delays for both vessels and trucking shipments to Guangzhou. Two temporary docks will be available as repairs to the bridge, said to take up to four to five months, get underway.
Air:
- Global Air Freight spot rates currently sit at $2.27, as rates continue to fluctuate according to the Freightos Air Freight Index (FAX)
- Europe to Northern America spot rates currently sit at $2.02 (100-3000kg), says FAX, decreasing by 0.5%
- Europe to Central Asia spot rates have decreased by 1.4% currently sitting at $2.11 (100-3000kg), says FAX
- Europe to Asia, Greater China spot rates currently sit at $1.44 (100-3000kg), says FAX
That’s all for this week’s update…
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