Sudden Container Shortage Drives Up Ocean Freight Rates, Impacting Global Trade

Sudden Container Shortage Drives Up Ocean Freight Rates, Impacting Global Trade


Global trade is currently facing a perfect storm, leading to a severe shipping container capacity crunch and an unexpected surge in ocean freight rates.

Factors Contributing to the Crisis

Peak Shipping Season: The onset of the peak shipping season is driving up demand.

Longer Transit Times: Vessels are taking longer routes to avoid the Red Sea, resulting in prolonged transit times.

Adverse Weather: Bad weather in Asia has disrupted key trade routes.

Port Skips and Reduced Time at Ports: Ocean carriers are skipping ports or spending less time at them, often not picking up empty containers to maintain delivery schedules.

Impact on Consumer Goods

The timing of these disruptions coincides with the movement of consumer goods for holiday seasons in Europe and USA. Emily Stausbøll, a senior shipping analyst at Xeneta, notes that spot rates from the Far East to the U.S. West Coast may exceed levels seen during the Red Sea crisis earlier this year, highlighting the dramatic rate increases. Xeneta’s data shows a significant rise in spot market rates and a growing disparity between spot and long-term rates. This disparity increases the risk of cargo being rolled, which is already occurring.

Rate Increases and Market Conditions

After an initial decline following the Red Sea tensions in early 2024, spot rates began to spike again at the end of April, increasing by as much as $1,500 on average for U.S. routes in the drought-ridden Panama Canal. High contract rates are now more than double those of the previous month. Stausbøll draws parallels to the chaos seen during the Covid-19 pandemic, with freight forwarders now pushed to premium rates to secure space guarantees. Xeneta’s early data suggests rates will continue to rise at the start of June.


Container Availability and Forecasts

DHL has been warning about a container crunch since January, citing longer routes to avoid the Red Sea Red Sea Situation & Impact on Global Shipping

and bad weather affecting port operations in China, Malaysia, and Singapore. Goetz Alebrand, head of Ocean Freight Americas for DHL Global Forwarding, explains that many trade lanes, including Asia to Latin America, Transpacific routes, and Asia to Europe, are experiencing space constraints. The situation is exacerbated by a shortage of 40-foot containers at ports like Chongqing in China.

Judah Levine, Freightos’ head of research, notes that while ocean carriers initially managed to offset longer voyages with idle vessels, there is now no excess capacity in the market. Delays due to bad weather in East Asia at the end of April led carriers to skip some port calls, further reducing the number of empty containers brought back to China.

Supply Chain Challenges

The imbalance in container availability has resulted in an increase in ocean freight rejections. The recent rise in demand for exports from China, coupled with fewer repatriated empty containers, means that empty equipment is becoming scarce at export hubs. Even with demand levels not being extremely high, the stretched vessel capacity and lack of containers are pushing rates up.

Potential for a New Post-Pandemic Supply Chain Cost Record

The recent surge in ocean freight rates follows a previous high earlier this year. Logistics providers are warning shippers globally about the container shortage  Red Sea Attacks Disrupt Global Trade , with prices potentially reaching a new post-pandemic high. Orient Star Group has warned clients about the severe equipment shortage due to long-term congestion, blank sailings, and increased demand caused by tariff implementations in South America. MSC, the world’s largest ocean freight company, has announced new rates of $8,000 to $10,000 for 40-foot containers to the U.S. Wan Hai has also indicated it will charge a premium for “space protection.”

Future Outlook

Drewry, a maritime shipping research firm, has reported a significant number of canceled sailings on the Transpacific route, with space availability contracting seriously to the U.S. East Coast. With U.S. retail sales forecasted to increase by 2.5% to 3.5% in 2024, the current market trend and space situation are expected to continue through June.

Early Peak Season Preparation

Logistics managers are preparing for peak season earlier than usual to avoid potential delays from labor slowdowns or strikes at East Coast or Gulf ports in the fall. Ensuring seasonal items arrive on time is crucial to avoid discounts on late-arriving products. The International Longshoremen’s Association and the United States Maritime Alliance are in the midst of negotiating a new master contract, with no updates on local negotiations yet.


The shipping container capacity crunch is creating significant challenges for global trade, with soaring freight rates and a shortage of containers. As logistics managers navigate these obstacles, early preparation and strategic planning will be key to mitigating the impact on supply chains and ensuring the timely delivery of consumer goods.

Read also: Sudden container crunch sends ocean freight rates soaring, setting off global trade alarm bells



Leave a Reply

Your email address will not be published. Required fields are marked *