Container shipping rates for important global trade routes have spiked this week due to the combination of Iran-backed Houthi forces in Yemen, and the recent air strikes against Houthi bases, by the US and UK. There are now shipping industry fears of a prolonged disruption to Red Sea trade routes, one of the busiest shipping corridors in the world.
Rates for oil tankers and freight carriers are rising, which could begin a new round of global inflation. As of last Friday, 1/17, the benchmark Shanghai Containerized Freight Index was up 16% over the week prior, to 2,206 points. The same index has gone up 114% since mid-December. See the graph below.
Container rates to the unaffected U.S. West Coast soared 43.2% to $3,974 per 40-foot containers, comparing last week to the week prior, according to leading ship broker Clarksons. Some shipping experts say that even if fighting ends and normal shipping is reopened through the Red Sea, it will take a at least two more months before normal shipping patterns are restored.
Rerouting one ship around Africa costs an additional $1 Million in fuel and 10 extra days. Vessel operators are rolling out Red Sea-related surcharges and rationing less expensive, contract-rate space – forcing some customers’ shipments into the more expensive spot market.
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