The container shipping market is maintaining its peak-season momentum, particularly on routes connecting Asia with the United States, while tanker markets are experiencing an equally dramatic surge in rates.
On the Transpacific, sustained peak-season demand has pushed spot container rates from Shanghai to Los Angeles to $7,712 per FEU, while rates from Shanghai to New York have reached $10,394 per FEU, according to Drewry.
Analyst Xeneta reports that spot rates to the US East Coast remain just 11% below their all-time pandemic-era high. The market is also expected to remain under upward pressure in the run-up to China’s Golden Week.
The strength of the market is not limited to container shipping. Large tanker rates have also moved into unprecedented territory, highlighting the exceptional volatility currently affecting maritime transport.
VLCC rates top $1 million a day
The rewards for owners willing to take the risks of sailing through the Strait of Hormuz have become extraordinary.
Spot rates for Very Large Crude Carriers (VLCCs) have surged well above the $1 million-per-day level. The Kuwait Prosperity, a Sinokor VLCC, has been fixed for a voyage from the Arabian Gulf to Asia at over $1 mln per day.
The Baltic Exchange’s TD3C route assessment has been even higher at over $1.2 million a day.
These levels show just how sensitive tanker earnings have been to the risks around the strategic waterway, where vessels continue to face heightened security concerns.
Iran widens blacklist in Strait of Hormuz
Tankers transiting the Strait of Hormuz have also seen increased risk as Iran has expanded its blacklist of vessels.
The number of blacklisted vessels has now risen to 77, most of the latest additions being crude oil tankers.
Iran has threatened that the vessels on its blacklist could be fined or detained or seized during future transits through the Strait of Hormuz.
So the combination of increased security risks and limited willingness of owners to transit the waterway is adding another layer of pressure to an already extraordinarily volatile tanker market.
At the same time the container market is still riding the wave of the continuing Transpacific peak season with rates to the US heading toward pandemic levels.
The past week has seen two major developments regarding standardized maritime transport. On one hand, freight pricing in container and tanker markets is extremely robust. On the other, operational risks are rising around one of the world’s most strategically important shipping routes.
