Maritime freight up sharply
Chinese supplies to EU countries are increasingly under threat. As a result of the shelling of ships in the Red Sea, shipowners are increasingly choosing routes other than the Suez Canal.
As recently as last December, it seemed that the attacks by the Huti rebels from Yemen were incidental and that the US navy would quickly deal with them. Meanwhile, in January this year, the situation has become really difficult, with not only China-Europe supply chains (and back) under threat, but also transatlantic sea routes. Freight prices are rising rapidly, which will ultimately hit European manufacturers and distribution companies.
The scale of sea freight increases is severe, although not the same everywhere. For example, on the route from the ports of Shanghai to Rotterdam, the largest port on the European continent, the price increase reached as much as 115% for a 40-foot container. Shipowners operating on routes from Asia to Europe send sea freight forwarders invoices with a surcharge for the delivery of the container. Analysing price levels, the Drewery Index has risen by 61% since 4 January 2024, which works out at $2,670 for a 40-foot (12-metre, 67.7 m3) container. It is primarily spot market rates that are rising, but shippers are already having to negotiate contract changes with their customers as well.
Another thing is that this is a good opportunity for shipowners to increase freight prices. In 2023, freight prices have even fallen below a thousand dollars on some routes. The opportunity for rises has already been provided by the recent introduction of emissions trading charges in maritime transport. Logistics operator Maersk has already announced that it will pass on the surcharge related to the Emissions Trading Scheme (ETS) to shippers. As a consequence, European manufacturers, as well as companies importing goods from Asia, will also be affected.
The European Union is becoming increasingly dependent on Chinese supplies. The trade deficit is now in the region of EUR 400 billion, which was ten times less just 20 years ago.
