Financial Services Agency, January 22: As the Red Sea crisis continues to disrupt shipping, global shipping prices have continued to rise and have fully doubled in the past month.

Furthermore, the Red Sea crisis also indirectly impacted supply chains in Europe and the United States, causing delays in product delivery and even forced some factories to shut down.

Global shipping prices doubled in a month

According to data from London-based Drewry Shipping Consultants (Drewry Shipping Consultants), the average global shipping cost for a 40-foot container rose 23% to $3,777 in the week ending January 18. And that price has more than doubled from a month ago.

In the week ending January 18, container spot market freight rates from China to Los Angeles in the US rose 38% to $3,860.

Philip Damas (Philip Damas), managing director of Drury Shipping Consultants, said:

Fluctuations are back, and this is a major moment for international container shipping.

Although large companies with long-term contracts with shipping companies are largely unaffected by fluctuations in the spot market, Damas said that many such companies currently need to pay 20% or more surcharges on top of the contract rate to compensate for rising transportation costs such as fuel and insurance.

Bruce Dzinski (Bruce Dzinski), head of another international logistics company in New Jersey, USA, said that his company's routes from Asia to US ports have now been delayed for up to a week, and the additional charge for each container is 300 to 500 US dollars.

Europe's manufacturing supply chain has been affected

Since the US-led coalition launched air strikes against the Houthis in Yemen, the Red Sea crisis has further escalated.

The International Monetary Fund said that up to now, maritime traffic through the Suez Canal has dropped 37% compared to a year ago. Shipping giants such as Maersk and Hapag-Lloyd (Hapag-Lloyd) have changed the shipping route of container ships to bypass the Cape of Good Hope at the southern tip of Africa, which means the transit time will be extended by more than a week.

Brian Bourke (Brian Bourke), the global chief commercial director of SEKO Logistics, an international logistics service provider in Illinois, USA, said that due to the rush of some European clothing companies to get their spring clothes on time, they have been forced to change logistics orders from sea to air to ensure that the goods arrive on time.

Over the past week, several more cargo ships have been hit by missiles or drones in the region. Maersk's CEO Vincent Clerc said last week that global shipping disruptions caused by attacks on Red Sea vessels are likely to last at least a few months.

These delays are already affecting Europe's manufacturing supply chain. Due to a shortage of spare parts, Tesla and Volvo plants in Germany and Belgium have suspended car production. Meanwhile, European retailers such as Ikea said they still have enough inventory to deal with the risk of delays.

Editor/Corrine