SCFI index soared 40% as ships diverted around Cape of Good Hope

The Shanghai Container Freight Index (SCFI) rose 40% on December 29, 2023, as shipping lines increased rates in response to capacity declines due to diversions in the Red Sea.

That day, the SCFI index closed at 1,760 points, up from 1,255 points the week before, a jump that has occurred only four times since the 2009 global financial crisis.

Shanghai-North Europe freight rates increased 80% to 2,694 USD/TEU; Shanghai-Mediterranean rates increased 70% to 3,491 USD/TEU; Shanghai-US West Coast rates increased nearly 38% to $2,553/FEU while Shanghai-US East Coast rates increased 19% to $3,559/FEU. There were also significant increases in rates from Shanghai-Persian Gulf and Shanghai-South America, increasing by nearly 39% and 19%, respectively, to 2,045 USD/TEU and 2,793 USD/TEU.

Linerlytica said in its latest report that this is only the fourth time since 2009 that spot freight rates have increased more than 40% in a single week.

Threats of attacks by Houthi rebels in the Red Sea, in retaliation for the Gaza War, have prompted major shipping lines to reroute ships around the Cape of Good Hope. Maersk Line, which had hoped to resume shipping through the Red Sea, the entry point to the Suez Canal, was forced to back down after Houthi rebels fired missiles at its ship, the 15,282 TEU Maersk Hangzhou, on 31 December 2023.

Linerlytica estimates that 12% of global container shipping capacity is currently diverted to the Cape route.

"Their numbers will continue to rise after the latest Houthi attacks forced Maersk to temporarily suspend Red Sea transits for the second time in as many weeks. The impact of the diversions will impact capacity available for departures from Asia starting from week 4 onwards, with significant drops in Asia-Europe and US East Coast capacity of up to 30% on certain weeks," said the consultancy.

Read more:

• MSC Statement on MSC UNITED VIII Incident in Red Sea
• Shipping lines changed routes due to escalating security concerns at Bab-al-Mandeb
• International shipping and logistics market update - Week 52/2023

Source: Phaata.com (According to ContainerNews) 

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