Ocean container shipping demand from China to North America and North Europe hit record highs in June 2024, driven by importers scrambling to secure their supply chains amid Red Sea disruptions, according to Oslo-based freight rate benchmarking firm Xeneta.
The latest data, released this week, showed a record 800,000 TEU were shipped from China to North Europe in June, while the China to North America trade saw its highest June volume at 1.36 million TEU. June 2024 was the eighth highest month on record, following the peak shipping volumes of late 2020 and 2021 during the Covid-19 pandemic.
Peter Sand, Chief Analyst at Xeneta, commented on the situation: “The conflict in the Red Sea has significantly altered the traditional seasonality of ocean supply chains. Concerned shippers have been rushing to import goods earlier in the year to avoid repeating the chaos of the pandemic years.”
Record volumes in June correlated with a sharp rise in average spot rates on trades from the Far East to the US and North Europe. Spot rates to the US West Coast and East Coast surged by 144% and 139%, respectively, while rates to North Europe increased by 166% between April 30 and July 1.
Sand added: “Shippers have been willing to pay a premium to protect their supply chains. The massive volumes shipped in May and June led to severe congestion at Asian ports and a dramatic spike in rates. Many shippers imported Christmas goods as early as May to mitigate risks, despite the high costs.”
However, Sand believes that record-breaking demand may have peaked as average spot rates from the Far East to the US West Coast and East Coast have decreased by 17% and 3.2%, respectively, and rates to North Europe have declined by 1.6%.
“The correlation between record-breaking volumes and spot market developments is clear. The recent softening of spot rates in August suggests that the peak in demand for ocean container shipping may have already passed, with volumes expected to be lower in July and August, which traditionally would have been the peak season,” Sand concluded.
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