Why container rates are climbing despite cooling demand

Container freight rates climbed on major Asia-Europe and trans-Pacific routes last week despite signs of cooling demand, as congestion and canceled sailings supported prices.

Carriers’ accelerating return to the Red Sea is reshaping shipping schedules, analyst and SONAR data contributor Freightos (NASDAQ: CRGO) said in an update, while a potential strike at Los Angeles-Long Beach adds another source of uncertainty for cargo owners.

Nearly two-thirds of capacity deployed between Asia and Europe is now routing through the Red Sea, according to Alphaliner. Its survey of the 10 largest carrier networks found that 24 of 46 direct services were using the passage, representing 63% of deployed capacity. The share was higher on Mediterranean routes, at 70%, than on North Europe services, at 58%.

Israeli carrier Zim announced a return to the Red Sea for its joint Asia-U.S. East Coast service with Mediterranean Shipping Co. The move is notable because Yemen-based Houthi rebels backing Hamas in Gaza declared the Bab el-Mandeb Strait in the southern Red Sea closed to Israel-linked vessels as recently as August.

This story was originally published by FreightWaves. Read the full story at FreightWaves →