Maritime freight rates to Europe have improved since early October after a continuous decline from their peak in July. However, the conditions behind this improvement are mixed. According to Xeneta data, demand for freight has been positive, and the volume of cargo from the Far East to Europe increased by 12.2 percent in the first seven months of the year. However, ships are arriving late at their destinations, and the return of Suez routes is improving capacity faster than the schedule.
Price Testing and Market Volatility
A recent Sogese report indicates that the market is moving towards price testing. The global container index Drewry reached $4,585 for 40 feet on October 22, the highest figure in the past 15 weeks, but fell to $4,389 by November 5, which is 4.3 percent lower than its peak. MSC has announced FAK prices of $4,500 for Northern Europe and $5,000 for the Western Mediterranean. Meanwhile, the freight rate from Shanghai to Rotterdam is $3,615 and from Shanghai to Genoa is $4,166, which is below these figures.
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The Impact of the Return of the Suez Canal on Capacity
The Suez Canal has a significant impact on the market by releasing hidden capacity before reliability improves. According to reports from BIMCO and Clarksons Research, weekly container capacity through the Suez Canal in the first two weeks of October was 753,000 TEU, showing a significant decrease compared to 1,457,000 TEU in the same weeks in 2023. Additionally, according to Alphaliner statistics, 63 percent of the capacity from the Far East to Europe on October 21 was on routes using the Suez.
Delays in cargo delivery have also created additional costs for Italian importers and exporters. Only 4 percent of cargo from the Far East to Europe arrived on time in September, with an average delay of 9.9 days. These delays affect inventory, production, and customer commitments more than a few hundred dollars difference per container.
Ultimately, Sogese expects that a controlled improvement will continue as the baseline scenario, while renewed security shocks remain a primary concern. In this regard, recommendations have been made for importers and carriers to act in the best possible way under current conditions.
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