The situation in the Red Sea region has not rebounded after the US jointly launched a series of massive attacks on Yemen. Market observers predict that shipping companies may further extend their decisions to bypass the Red Sea route, resulting in drastic shipping costs.

According to data from ship brokerage firm Clarksons, the number of container ships entering the Red Sea through the Suez Canal in the first week of January 2023 has decreased by 90 percent compared to the same period last year.

Transportation costs have risen due to the shipping companys turnaround of good hopes. Container prices on some Asia-Europe routes have recently surged by 600%. At the same time, U.S. market shipping costs have also risen dramatically, rising by 50%.

JPMorgan warned that if global transportation costs continue to rise, commodity prices will rise, and the consumer price index could rise in the coming months.

U.S. shipping costs rise.

According to the Shanghai Export Container Shipping Price Index (SCFI) data, U.S. shipping prices rose more than 40%, European shipping prices increased more than 10%, pushing the SCFI index to rise seven weeks in a row, breaking 2200 points. Since December 2023, the price rise in the Red Sea region has resulted in European shipping prices increasing more than 2.6 times, and U.S. shipping prices increased 1.4 times.

Data from the Shanghai Shipping Exchange showed that on January 12, the Shanghai export container comprehensive shipping price index was 2206.03 points, up 16.3% from the previous period.

Under the influence of the efficiency of the Panama Canal, the North American routes are tense and the container market shipping costs soar.On January 12, Shanghai to the US West and the US East Basic Port market shipping prices were $3974 / FEU and $5813 / FEU, respectively, up 43.2% and 47.9% compared to the previous period.

The increase in shipping costs on European routes has decreased over the previous weeks, but it is likely that the increase will continue as the situation in the Red Sea escalates and shipping costs from Asia to Northern Europe and the Mediterranean Sea increase.

Price increases spread to other routes

The Red Sea crisis caused the European line operations to profit from losses, and the US line to earn more profits.This crisis covers the game of great powers, multinational economic interests and religious factors, many variables and short-term difficulty to solve.

A large number of ships from Asia to Europe and the U.S. East may continue to circumvent the good-looking corners until the first quarter or the first half of the year. This helps to maintain high shipping prices and digest excess capacity.

Xeneta chief analyst Peter Sand said that the longer the crisis lasts, the greater the interference with global maritime transportation, and the cost continues to rise.

Europe is continuously affected by the Russian-Ukrainian conflict and the Red Sea crisis, and the economy is weak; in comparison, the U.S. economy is more likely to land softly, and people continue to consume, supporting the rise in U.S. line shipping prices.

The recovery of demand in Europe and the United States is clear in March after the Lunar calendar year.Such as U.S. interest rate cuts and inflation control, demand is expected to warm up.

Several shipping companies and freight shippers expect the Red Sea crisis to last longer.Since the suspension of passage to the Red Sea in mid-December 2023, industry estimates that Asia may face shortages of ships and containers from the second half of January.