Input Stories

Input Stories

Is Ocean Freight Inflation Cooling?

The freight inflation that has resulted from Houthi terrorist attacks on ships in the Red Sea may soon be over, according to CNBC.

What’s going on: “Shipping rates on ocean routes from Asia to the U.S. are beginning to decline, based on analysis of the latest cargo data from Xeneta, a leading ocean and air freight benchmarking platform. Europe and the Mediterranean rates had already started to decline at the end of January.”

  • American shippers have experienced ocean freight rates from the Far East to the U.S. increase from 146% on the East Coast to 186% on the West Coast.
  • Container rates for the latter route dipped to $4,680 from $4,730 from Feb. 1 to Feb. 15, according to Xeneta.
  • In the same period, container rates for 40-foot containers edged down to $6,100 from $6,260.

Ongoing attacks: Despite the price decreases, attacks on commercial vessels worldwide continue full force.  

  • “Most recently, the United Kingdom Maritime Trade Operation said a bulk carrier was attacked by rocket fire off the coast of Aden, Yemen, with the ship suffering minor damage, though no crew injuries were reported. It marked the forty-eighth attack on commercial shipping since November 19.”

What to expect: “Early indications suggest a further softening of the market in the next 10 days,” a Xeneta analyst told the news outlet.

  • “Unlike during COVID-19 when disruption continued to wreak havoc, shippers and carriers now know what they are dealing with in terms of ships being diverted around Africa to avoid the Suez Canal. … [P]erhaps some semblance of order has been restored.”
  • However, current low freight volumes out of China will likely pick back up after the Lunar New Year, which ends Feb. 24.

Why it’s important: The timing of the price drops could affect contract negotiations between ocean freight carriers and shippers beginning next month.​​​​​

View More