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Ocean freight rates are surging after Houthi rebels attacked a Maersk ship last weekend caused carriers to suspend plans to restart transits through the Red Sea en route to the Suez Canal, Reuters reported Wednesday.
The attacks have forced ships to reroute around the southern tip of Africa, driving up the cost for vessels for the longer voyage, although rates remain well below COVID-era levels.
The trade route is used by as much as one third of global container ship cargo, and re-directing ships around the Cape of Good Hope to avoid attacks is expected to cost as much as $1M extra in fuel for every round trip between Asia and Northern Europe.
Hundreds of container ships and other vessels have been rerouted, adding 7-20 days to their voyages.
Asia-to-North Europe rates more than doubled to more than $4,000 per 40-ft. container this week, with Asia-to-Mediterranean prices jumping to $5,175, according to Reuters, citing international freight booking and payments platform Freightos (CRGO).
Rates for shipments from Asia to North America’s East Coast surged 55% to $3,900 per 40-ft. container, and West Coast prices soared 63% to more than $2,700 ahead of expected cargo diversions to avoid Red Sea-related issues, Freightos said.
Potentially relevant stocks include ZIM Integrated Shipping (NYSE:ZIM), which ended Wednesday +9.5% to its highest close since August, as well as Danaos (DAC), Global Ship Lease (GSL), Matson (MATX), Navios Maritime Partners (NMM), Eagle Bulk Shipping (EGLE), International Seaways (INSW), Star Bulk Carriers (SBLK), Diana Shipping (DSX), Genco Shipping (GNK), Ardmore Shipping (ASC), Safe Bulkers (SB), Grindrod Shipping (GRIN).