by alliancebee
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- As most carriers have re-routed container vessels around the Cape of Good Hope to avoid the tension at the Suez Canal spot rates have increased significantly as transit time increases. The latest spot rate from Asia to the US West Coast is $5,000.00 which is almost double the amount prior to these planned reroutes. Additionally, freight-all-kinds (FAK) rates have increased from $1,750 to $2,750.00 on January 1st. Even the Asia to East cost rate has been impacted, seeing an increase to $7,000.00 per FEU.
- It is likely these increases are here to stay for the foreseeable future as there is no sign of improvement at the Suez Canal and currently only CMA and a few other niche carriers are the only carriers currently that are continuing to use the Suez Canal route. It is believed that this will likely create a 40% shortfall in departures.
- It is also important to note that carriers have provided an indication that even if the situation was suddenly resolved in the ongoing conflict affecting this vital trade route it would take 3-4 months before any relief would be seen in rates and transit times.
As rates continue to climb the question becomes just how high will they go?
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