By Sherine    Photo： Emre Karahan

Container shipping rates on major international trade routes have experienced a significant increase. Due to U.S. and UK air strikes in Yemen, concerns are rising regarding the impact on one of the busiest maritime routes worldwide. The majority of container ships were already steering clear of the nearby Suez Canal. Maersk has already announced that it would continue to suspend Red Sea transits and reroute around Africa’s Cape of Good Hope. This decision was made in response to the recent attacks on the container ship Maersk Hangzhou.

Current spot rates and surcharges are experiencing rapid increases. However, the costs for shipping companies are also increasing because they are using a lot more fuel for longer trips. This has raised concerns that prices for oil tankers and bulk carriers, which transport essential goods, might increase significantly. This heightened risk could lead to a new phase of global inflation.

The benchmark Shanghai Containerized Freight Index increased by more than 16%. According to shipbroker Clarksons, prices for shipping on the Shanghai-Europe route went up by 8.1%, reaching $3,103 per twenty-foot equivalent unit (TEU). Simultaneously, the price for containers bound for the U.S. West Coast surged by 43.2%, hitting $3,974 per forty-foot-equivalent unit (FEU).

Rates on the most impacted routes have doubled, compared to a month ago, but they still remain below the record highs seen during the pandemic. Diverting a ship around Africa increases the travel time by approximately 10 days and adds $1 million in fuel costs for each one-way journey between Asia and Europe. As this crisis persists, it will increasingly disrupt ocean freight shipping worldwide, leading to a continuous escalation in costs.

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