Container rates increase sharply as Suez fallout continues

Published on: 20th April 2021

The Asia-Europe route has been affected as a result of vessel and equipment capacity in Asia, with a knock on effect on container rates.

According to shipping publication The Loadstar, there have been reports of what have been described as “sharp increases” in Asia-Europe container spot rates, as the fallout from the recent Suez Canal blockage has resulted in a shortage of both vessel and equipment capacity in Asia.

According to Drewry’s WCI index, rates from Asia to North Europe have increased by at least 5%, to around $8000 per 40ft container. However, in practice, shippers are paying much more – and that is if they can find a line to accept bookings in the first place.

One UK-based freight forwarder commented: “Spot rates are being driven up, and longer-term or contract rates are effectively worthless. There is already limited equipment and booking availability, which is varying from line to line and from origin to origin. Finding a line with a booking slot has become a struggle and when slots are found, they will go quickly if the booking is not confirmed immediately. This means when we quote a spot rate, we may only have a very limited time – sometimes only 10-15 minutes – before that quote becomes unavailable to book.”

Even more concerning for UK importers, it seems the situation could get worse before it gets better. During a  recent press briefing, Hapag-Lloyd CEO Rolf Haben Jansen said: “Box availability will be tight for the next six to eight weeks. We expect most services will miss one-to-two sailings, which will impact available capacity in Q2.”

He went on to say that he was “optimistic of a return to normalcy in Q3.” Assuming this is the case, early autumn winter shipments from Asia to the UK may be affected, with some importers choosing to delay shipments until slightly later in the season to avoid higher rates. However, with many major accounts requesting June and July deliveries for the autumn winter season, and some having a heavy fine system in place for late deliveries, many suppliers will not have the luxury of being able to defer shipments to a later date.



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