February 2025
GAPUMA, LONDON
The global shipping industry is once again grappling with a surge in ocean shipping rates, vessel backups at seaports, and shortages of empty containers, reminiscent of the supply-chain crisis experienced during the COVID-19 pandemic. As the industry enters its busiest season, these issues are causing widespread concern among traders and logistics companies.
The sudden and sharp increase in shipping rates is creating significant challenges for businesses worldwide, affecting the timely delivery of goods and adding to the costs of global trade. As companies scramble to adapt to these evolving conditions, the situation underscores the ongoing volatility in the global supply chain landscape.
“There is a cocktail of uncertainty and disruption across global ocean freight supply chains,” remarked Peter Sand, chief analyst at pricing platform Xeneta. “It is the speed and magnitude of this recent (rate) spike that has taken the market by surprise,” he added.
In late May, the spot rate to ship a 40-foot (12-meter) container from China to Northern Europe soared to $4,615, marking an almost 3.5-fold increase since the beginning of the month. Although this rate remains below the all-time high of $14,407 seen in January 2022, it signals a significant upward trend, according to Peter Sand, chief analyst at pricing platform Xeneta. Notably, this rate does not include the $10,000 “diamond tier” rates for priority shipments.
The spot rate for containers from China to the U.S. East Coast also saw a sharp rise, reaching $6,061, up from $2,772 on May 1. Still some way off the $11,900 peak of January 2022.
The roots of the container industry’s current struggles can be traced back to December 2023, when major shipping lines like Maersk and Hapag-Lloyd began diverting vessels away from the Red Sea and Suez Canal. This strategic shift was in response to Houthi drone and missile attacks from Yemen. As a result, ships on routes from China to Europe and China to the U.S. East Coast have been navigating around Africa, leading to cascading disruptions and increased costs across global supply chains. These supply chains heavily depend on ocean vessels, which transport approximately 80% of international trade volume.