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Container Shipping Rates Stabilising Despite Continued Attacks

GLOBAL

Attacks by Iranian-backed Houthi rebels on shipping in the Red Sea have resulted in a sharp drop of 45% in traffic passing through the Suez Canal. These vessels have been rerouted around southern Africa which can add up to 2 weeks to journey times. This has resulted in a jump in shipping prices since the end of 2023 but they appear to have levelled off. But with a crew having to abandon ship on Sunday and contracts renewed in March, it may still be too early to say the threat to inflation has passed.

  • Last week FBX global container rates fell 2.9% but are still 160% higher than the end of 2023 and the 2024 high was recorded last Wednesday. They are down around 2% since the end of January. They remain around 70% below the September 2021 peak that contributed to the world’s inflation problem, and so while current rates are up if they do stabilise here, they don’t look a problem.
  • The Suez canal is vital to European trade but container rates for the China/Asia to Mediterranean route fell 13.9% last week to be down almost 16% this month but are still up 155% this year. They appear to have peaked. The China/Asia to the east coast of north America rate is not as clear as it is still almost 4% higher than the end of January and almost 170% than the end of 2023.
  • Supply chains don’t seem to be broadly impacted by the delay to vessel arrivals (see MNI: Ship Data Assuage Red Sea Inflation Fears - Researcher) with the NY Fed global supply chain pressure index still negative in January.
Global FBX container rates USD/points

Source: MNI - Market News/Refinitiv

Global FBX shipping rates y/y%

Source: MNI - Market News/Refinitiv

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