Brace yourselves, exporters and importers: shipping costs across the Atlantic are about to get steeper. Starting in June, sea freight charges to Europe and the United States are set to rise due to surcharges implemented by major shipping lines.
This increase comes as a result of the ongoing closure of the Suez Canal for cargo ships. Since November 2023, security concerns due to Houthi rebel attacks have forced vessels to take the much longer route around Africa’s Cape of Good Hope. This detour adds a significant amount of distance – roughly 6,000 nautical miles on a typical Asia-to-Europe voyage – and consequently, travel time can more than double.
To offset the additional expenses incurred by the longer route, shipping lines are introducing surcharges. German giant Hapag-Lloyd will be imposing a Peak Season Surcharge (PSS) of $1,000 per container for shipments from India and West Asia to the US West Coast. Similar charges are planned for other routes, with Maersk and CMA-CGM also announcing surcharges for journeys to the US and Europe.
The impact of these surcharges will be felt by businesses on both sides of the Atlantic. Exporters will face higher shipping costs, potentially squeezing their profit margins. Consumers may also see the effects through an increase in the price of imported goods.
Experts warn that this is just the tip of the iceberg. The reliance on the Cape of Hope route, coupled with the peak season for shipping approaching, could lead to further price hikes in the coming months. Businesses are advised to factor in these rising costs when planning their shipments.
