Markets/Trades

With the stakes raised amidst heightened risks of retaliatory Houthi attacks on ships in the Red Sea, carriers continue to take radically different approaches to their Suez services. CMA CGM and a handful of niche carriers continue to make Suez transits while all of the other main carriers have shifted to the Cape route. The Asia-Europe trade faces a severe capacity shortage in the coming weeks, with some 70 additional ships required to maintain weekly sailings on the 30 regular services on th

Charter rates continue to rally as carriers raise their tonnage demand in tandem with the rising freight rates on Red Sea and Suez routes which has also spilled over into the Transpacific routes last week. Activity is high across all size segments with clear rate gains across the board apart from the smaller ships below 1,300 teu that continued to weaken. Maersk took the 15,258 teu newbuilding ONE FOCUS, in a private deal with ONE for an unspecified period for deployment on the FE-USWC for its

Freight rates surged across the board, with Transpacific SCFI rates rebounding sharply last week. MSC’s rate hike to $5,000/feu to the USWC and $6,900/feu to the USEC from 15 January jolted the rest of the carriers into following suit, with spot rates to both the West Coast and East Coast rising by over 40% last week. Zim has confirmed the introduction of a new PNW string from next week as it seeks to take advantage of the higher transpacific rates rates. SCFI rates made its 8th consecutive we

Option for those wanting to hedge against volatility in container shipping freight rate: CoFIF (Container Freight Index Futures)'s Asia-Europe contracts are trading at something (in $/40'dry) like $2400 for April, $2250 for June, $2147 for August and $1900 for October (our estimates) while liners are offering $3500 for annual contracts while spot rates at the moment is racing up t $5000 or above. Frankly no one know for sure where the freight rates will be in April through October. They could

Week 1 capacity to North Europe was higher than normal with bunching departures on 2 OCEAN Alliance services (NEU6 and 7) and 1 THE Alliance service (FE2) lifting overall capacity to 344,710 teu compared to an average of 284,180 teu in December. Overall capacity will drop from week 2 onwards with severe shortfalls expected in weeks 5 and 6 when capacity drops to 240,700 an 126,700 teu in those 2 weeks when demand will be strong due to the pre-Chinese New Year cargo rush. Although the weekly cap

CoFIF contracts surged in the first 2 trading days of 2024 and traded limit up to their maximum daily caps before softening in the next 3 trading days as the market awaits further signals from the SCFIS. Traders continue to prefer longer dated contracts, indicating a growing consensus that the Red Sea diversion may drag on. Open interest fell for the 2nd week in a row to just half of the peak on 22 December. This week’s trading will be driven by the latest SCFIS assessment on 8 January for the

The number of containerships that has been diverted from the Suez to the Cape route has reached 354 ships since 15 December 2023, accounting for 80% of all the ships moving between the Atlantic/Med basins and the Indian Ocean. The number will continue to grow over the coming week with most of the main carriers currently opting for the Cape route. Only CMA CGM and a small number of niche carriers operating in the Asia to East Med and Baltic markets that have continued to use the Suez route with r

Transpacific freight rates have risen in tandem with European rates last week, rising to $2,553/feu to the West Coast and $3,559/feu to the East Coast, both breaching their 12 month highs. Capacity is expected to remain tight in the coming weeks, with reduced departures available in January especially on the US East Coast routes where the diversions to the Cape route will start to have an impact from week 3 onwards. Carriers are also switching ships away from the US West Coast to Europe where t

CoFIF’s April contracts (EC2404) soared to a new high on 27 December but retreated on the last 2 trading days of the year to close at to 1,643 as the traders unwinded some of their pairs (long EC2404 and short EC2412). Market conviction weakened with Open Interest balance dropping through the week to end down by 50% WoW, with Maersk’s decision to resume Suez transits earlier last week dragging down the forward expectations. The latest SCFIS assessment on 1 January for the Asia-North Europe rout

The number of containerships diverted to the Cape Route has reached 262 ships as at 31 December 2023 with a total capacity of 3.4m teu or 12% of the global capacity. Apart from ships diverted from the Suez route, there is also an increasing number of ships diverted from the Panama Canal to avoid the Canal congestion. With the crisis hitting Europe rates the hardest, European carriers have taken a divergent approach with Maersk and CMA CGM resuming Suez transits as of last week while MSC and Ha