Maersk ship entering the Port of Rotterdam. Photo: Shutterstock

Container Spot Rates Set to Rise Further

Mike Schuler, June 14, 2024

Ocean freight container shipping spot rates are set to increase further, but growth may be slowing, according to ocean freight rate benchmarking firm Xeneta.

Xeneta data indicates average spot rates from the Far East to the US West Coast are expected to rise by 4.8%, reaching USD 6,178 per 40ft equivalent container (FEU). This contrasts with a 20% increase on the same trade earlier in the month. Similarly, rates from the Far East into the US East Coast should go up by 3.9% to stand at USD 7,114 per FEU, a more moderate jump than the 15% increase on June 1st.

These increases, while less dramatic than previous ones, still present a challenging situation for shippers, as some face the potential of not being able to ship containers on existing long-term contracts.

The rates from the Far East to North Europe are set to rise by 10% on June 15th, hitting USD 6,357 per FEU. Meanwhile, rates from the Far East to the Mediterranean should go up by 7.2%, reaching USD 7,048 per FEU.

Peter Sand, Xeneta Chief Analyst, says the market remains challenging with ongoing conflict in the Red Sea region, port congestion, equipment shortages, and potential labor issues at US ports.

“With ongoing conflict in the Red Sea region, congestion at ports in the Mediterranean and Asia, equipment shortages and shippers frontloading imports ahead of the Q3 peak season, the pressure within the ocean freight container shipping system is still at severe levels,” Sand said.

He also pointed out the potential impact of increasing spot rates on inflation in the US and Europe if these costs are passed on to consumers. Compared to mid-December, average spot rates from the Far East have increased by 276% into the US West Coast and 316% into North Europe due to the conflict in the Red Sea. However, he noted that predicting the market accurately is challenging given the number of factors in play, including potential ceasefires and union actions at US ports.

“At the moment it is unlikely – but not impossible – that spot rates will reach the levels seen during the Covid-19 pandemic but there are so many factors in play it is not possible to predict the market with any degree of certainty,” said Sand.