Houthis damage subsea cables connecting Europe to Asia Houthis damage subsea cables connecting Europe to Asia

The surge in costs, expected in June 2024, marks a substantial rise of approximately 400% since October, highlighting the profound impact of the ongoing global supply chain disruptions.

The crisis in the Red Sea over the past two weeks, coupled with unexpectedly high demand, caught many companies arranging shipments from Asia to Europe off guard. Consequently, indices tracking urgent shipping costs this week began reflecting changes previously only discussed informally within the industry.

Last week, Drewry's World Container Index (WCI) recorded a 20% increase for the Shanghai-Rotterdam route compared to the previous week, reaching $3,709 for a 40-foot container. This increase mirrored the direction of the Xeneta XSI, which rose by 15% to $3,716 for the same size container.

Alongside the escalating urgent shipping prices, availability in the shipping arena from Asia is becoming increasingly limited. As reported by shipping companies and agents in the sector, this scarcity has allowed shipping firms to favor long-term contracts over shipments paying higher rates known as Free Alongside Ship (FAK).

According to Loadstar, Maersk announced plans last week to implement an additional $1,500 charge per 40-foot container from Asia to Northern Europe during the peak season starting May 11. However, indications suggest that this peak season pricing may have been enacted earlier.