Over the past month, from the Panama Canal to the Red Sea, from the Rhine to the Black Sea, multiple key global shipping channels have been hit successively by war and extreme weather, sending freight rates soaring and some routes hitting record highs. As traditional shipping networks come under frequent pressure, Mexico, Thailand and China, among others, are laying out alternative routes, adding new transport options for global trade.
War and drought grip the lifelines of global shipping.
According to the Financial Times on Aug. 17, shipping through the Bab el-Mandeb Strait has been disrupted by attacks on ships by Yemen's Houthi armed forces. Data from Argus, an energy commodity price assessment agency, shows that on Aug. 10, the cost of shipping oil by sea from the Persian Gulf to Asia soared to $15.22 per barrel, the highest level since records began in 2005. In the same period, freight rates for tankers sailing from the Black Sea to the Mediterranean also hit a peak.
In addition, the Panama Canal recently saw water levels hit a critical low due to the El Nino phenomenon, compounded by a surge in demand for rerouting caused by the Middle East conflict. In early August, tolls for the two sets of locks were auctioned at historic highs of $1.1 million and $2.5 million respectively.
In Europe, drought has pushed Rhine water levels to dangerously low. Barge freight to Cologne, Duisburg, Frankfurt and Karlsruhe in Germany, transported via the river, has climbed to its highest level since 2012. The container shipping market shows a similar trend. Taking the Asia-to-U.S. East Coast route as an example, the average spot container rate also rose 234% year-on-year, reaching $10,249 per 40-foot container.
The Financial Times, citing John Oullette, head of European freight pricing at Argus, said, 'This is undoubtedly the largest disruption the shipping market has ever faced, exceeding even the pandemic period.' Peter Sand, chief analyst at ocean freight data platform Xeneta, said the chaos caused by the Middle East war has become a 'deep structural problem,' and the rising freight rates will ultimately be passed on to consumers through the supply chain.
Source: Global Times | Original
