The cost of shipping goods from Asia to Europe has decreased by 5% in the past week, according to a report by Drury Shipping Research. The decline is attributed to the return of ships to the Suez Canal and reduced demand. The latest report from Drury's Container Index shows that shipping rates for 40-foot containers on the Shanghai-Genoa route fell to $4,016, while rates to Rotterdam dropped by 9% to $3,626 as of September 17.
The report expects prices to continue decreasing in the coming weeks, despite capacity constraints due to congestion at Asian ports, particularly in Shanghai. The waiting time for ships to dock at Shanghai port increased to 78 hours in week 37, up from 65 hours in the previous week. However, some shipping companies are canceling voyages, which may impact prices. Four cancellations were announced for the next seven days, compared to only one cancellation this week.
In contrast, shipping rates on trans-Pacific routes saw an increase. Rates from Shanghai to Los Angeles rose by 5% to $7,712, and rates to New York increased by 7% to $10,394. The report expects a slight increase in rates next week due to cancellations announced by shipping companies ahead of China's Golden Week holiday.
The report also notes that the situation remains uncertain due to security risks in the Red Sea and Bab al-Mandab Strait, particularly with the Houthi takeover of the Yemeni coastal city of Mocha and several islands in the region. The Houthi group has stated its intention to target ships linked to Saudi Arabia, which could impact shipping operations.
Despite these challenges, container shipping in the region continues to grow steadily. The return of ships to the Suez Canal has been observed, with OOCL's vessel passing through the canal, marking the resumption of operations by the Cosco group. Some shipping alliances, including the Premier Alliance, have also resumed using the Suez Canal.
The Premier Alliance, consisting of Japan's One, South Korea's HMM, Taiwan's Yang Ming, and Evergreen, has resumed using the Suez Canal. However, not all shipping companies have followed suit, and the situation remains uncertain due to ongoing security concerns.
The fluctuations in shipping rates and operations are being closely monitored by industry stakeholders, as they can have significant impacts on global trade and economies. The coming weeks will be crucial in determining the future trajectory of shipping rates and operations in the region.
Key points
- Shipping rates from China to the Mediterranean have dropped by 5% due to the return of ships to the Suez Canal and decreased demand.
- Trans-Pacific shipping rates have increased, with rates from Shanghai to Los Angeles rising by 5% and rates to New York increasing by 7%.
- Security concerns in the Red Sea and Bab al-Mandab Strait continue to impact shipping operations, with the Houthi group threatening to target ships linked to Saudi Arabia.
