The Iran conflict has sent shockwaves through the global shipping industry, causing trans-Pacific ocean shipping trade rates to soar by double-digits in just one month. As a result, shippers are facing higher costs for transporting goods from Asia to the United States.
Freight rates on U.S.-bound trades from the Far East have increased significantly due to disruptions in the Middle East, which has forced carriers to reroute their services through Southeast Asian transshipment hubs.
These bottlenecks have resulted in higher prices for shippers moving cargo to the U.S. via these hubs, with spot rates reaching $2,857 per forty foot equivalent unit (FEU) from the Far East to the U.S. West Coast and $3,871 per FEU to the East Coast.
Analysts predict that the crisis has simply migrated from the regional to the global, affecting not only Asian-Pacific shipping but also European ocean container shipping trades.
The ongoing conflict has led carriers to build entirely new service networks with little to no warning, including rerouting via land bridges such as Jeddah and alternative ports on the Indian Ocean coastline.
This has resulted in increased freight rates, with spot rates from the Far East down 6% to North Europe and 13% to the Mediterranean compared to one month ago.
Despite some softening of rates on European trades, analysts caution that the market is not yet returning to normal due to ongoing disruptions.
The Strait of Hormuz remains effectively closed to container shipping, and carriers are still using costly workarounds to stabilize supply chains.
The ongoing conflict has forced carriers to build new service networks, leading to increased freight rates.
