LONDON – Spot ocean container rates rose an average of 23% this week to $3,777 as conflict in the Red Sea continues. They’re now up 82% from the same week last year, per Drewry’s shipping tracker.
Over the previous few weeks, rates have soared from Shanghai to European cities but saw just small increases to the U.S., rising 8% to New York and 2% to Los Angeles last week. This week, however, rates saw massive increases to U.S. routes. Spot rates rose 38% from Shanghai to Los Angeles to $3,860, and 35% to New York to $5,644.
Average rates are now the highest seen since October of 2022 and are 166% higher than the pre-pandemic 2019 rates of $1,420. Just three months ago, rates were 6% lower than their pre-pandemic average.
As reported previously, rates are spiking due to the ongoing conflict in the Red Sea. They’ve been rising since Yemen’s Houthi militants began attacking certain container ships traveling through the Suez Canal three weeks ago as a response to the Israel-Palestine conflict. To cope, ocean carriers began diverting ships to travel around the horn of Africa through the Cape of Good Hope instead, which adds around 14 extra days to a ship’s journey, as well as increasing costs.
The issue is being compounded by a months-long drought in the Panama Canal, which has provoked carriers to redirect freight over to the Suez, only for it to be diverted again.
Furniture importers are being affected on both coasts. Some are seeing minor delays, while others are making major redirects, with East Coast importer BDI opting to shift half of its product over to the West Coast instead. See how companies are coping here.