Maritime transportation costs soar due to tariffs and Red Sea diversions

“It is the speed and magnitude of this recent rebound (in rates) that has taken the market by surprise,” he said.

On Friday, the spot rate to ship a 40-foot (12-meter) container from China to northern Europe was $4,615, nearly 3.5 times higher than on May 1, but far from the all-time high of $14,407 in January. 2022, Sand said.

That fee excludes the $10,000 “diamond level” fees for priority shipping.

The spot exchange rate between China and the US East Coast was $6.061 on Friday. That rate was $2,772 on May 1 and reached an all-time high of $11,900 in January 2022, he said.

The container industry’s problems date back to December, when Maersk, Hapag-Lloyd and other shipping companies diverted ships from the Red Sea and Suez Canal to avoid Houthi drone and missile attacks from Yemen.

Ships plying routes between China and Europe and between China and the US East Coast are instead sailing around Africa, causing cascading disruptions and rising costs in supply chains that rely on ocean-going vessels. , which transport around 80% of the volume of international trade.

Pricing experts said spot rates will continue to rise as retailers like Walmart and Target stock up for the back-to-school, Thanksgiving and Christmas holidays, and as manufacturers and importers rush to introduce merchandise for avoid possible tariff increases.

“In the short term we will see a significant contraction in the form of very high rates and additional delays,” said Judah Levine, head of research at Freightos.