Global demand for ocean freight container shipping reached an unprecedented level in May 2024, driven by soaring spot rates and severe port congestion, according to the latest data from Xeneta, a leading ocean and air freight rate benchmarking and intelligence platform.

A record 15.94 million twenty-foot equivalent units (TEUs) were transported by ocean in May, surpassing the previous record of 15.72 million TEU set in May 2021, as reported by Xeneta and Container Trades Statistics. This surge in demand brought the year-to-date volume to just under 74 million TEU, marking a 7.5 per cent increase compared to the first five months of 2023.

The spike in global demand is primarily driven by volumes from the Far East, with China exporting an all-time high of 6.2 million TEU in May, including 853,000 TEU of intra-China container demand. This accounted for 39 per cent of global container trade in May and was accompanied by skyrocketing spot rates on major fronthaul trades, as per Xeneta.

The average spot rates from the Far East to the US West Coast stood at $7,840 per forty-foot equivalent unit (FEU) on July 9, a 200 per cent increase since April 30. To the US East Coast, average spot rates rose by 130 per cent during the same period, reaching $9,550 per FEU. Meanwhile, spot rates to North Europe and the Mediterranean increased by 148 per cent and 88 per cent, respectively, standing at $8,030 and $7,830 per FEU.

TEU-miles have increased by 17.9 per cent globally in 2024 to date compared to the same period in 2023. This surge is mainly driven by Red Sea diversions and extended sailing routes around the Cape of Good Hope.

Notably, the major deep-sea trades out of the Far East, which are the primary drivers of the record-breaking ocean container shipping demand, are most affected by the Red Sea diversions. If ocean container carriers had continued to utilise the Suez Canal, TEU-miles would have increased by a lesser, but still significant, 8.6 per cent in 2024 to date.

“More containerised goods are being shipped by ocean than ever before at a time when available capacity is impacted by diversions around Africa due to conflict in the Red Sea and severe port congestion in Asia and Europe. This is a perfect storm of pressure on ocean supply chains which has resulted in the chaos of recent months. In many respects it is impressive that global shipping networks have been able to transport this enormous volume of containers under such challenging circumstances,” said Emily Stausboll, Xeneta senior shipping analyst.

Fibre2Fashion News Desk (DP)