FRANKFURT (Reuters) – Strong demand for container shipping has pushed freight rates higher in the past two months, Hapag-Lloyd Chief Executive Rolf Habben Jansen said on a call with reporters on Wednesday.
He said attacks on ships by Yemen-based Houthi militants had prompted shipping companies to avoid the Red Sea, which connects to the Suez Canal, and instead use a longer route around South Africa, a situation whose end is difficult to predict.
“We have seen strong demand, especially since May 1, which is offset by limited availability, also due to the situation in the Red Sea, which is why spot prices are higher,” Haben Jansen said.
The CEO, who heads the world’s fifth-largest container company, showed slides showing forecasts that global demand for container space could grow by 3% to 4% year-on-year in 2024.
He added that the price could reach above that range, in his view, citing high demand across the Pacific as consumers restock.
He said the demand trend, coupled with the rerouting of ships in the Red Sea and port congestion in Asia, had worked to counter what could have been an oversupply picture in the global fleet this year.
The diversions result in the retention of approximately 5-9% of global ship capacity.
The Freightos spot container rate index, which tracks the average price of a 40-foot container on 12 major trade lanes, has risen 40% in the past six weeks to $5,068.
Hapag-Lloyd’s small free float shares have risen 7% since mid-May.