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LOS ANGELES: The off-contract ocean container shipping rate from China to the US East Coast has returned to levels seen after COVID-19 upended global trade, and could set new record highs as the US and Israeli war on Iran drives fuel costs higher.<\/p>\n
The spot rates on that route hit $10,948 per 40-foot container, more than quadrupling since the start of the Iran war on February 28, according to data from freight pricing platform \u200cXeneta.<\/p>\n
\u201cThat leaves freight \u200crates on these critical trades just short of \u200bthe \u200call-time \u2060high set \u200bduring \u2060the COVID-19 disruption,\u201d Peter Sand, Xeneta\u2019s chief analyst, said of the route, where rates hit a record $11,900 in January 2022. The Shanghai to New York route is among the busiest and most profitable for global container carriers, including MSC, Maersk, COSCO and CMA CGM.<\/p>\n
Crude oil prices soared after hostilities intensified with the US and Iran attacking and sinking some oil tankers in the Strait of Hormuz and Saudi Arabia \u2060closing its vital East-West pipeline due to aerial attacks in \u200cthe widening Middle East war.<\/p>\n
Those events pushed \u200cup the global 20-port average price for the very \u200blow sulfur fuel oil, known as \u200cbunker, used by many container ships. It hit $901.50 per metric ton on \u200cThursday, up from $543.50 per metric ton on February 27 but still below the March 20 peak of $1,053 per metric ton, according to marine fuel price publisher Ship & Bunker. Container ship owners recoup those higher costs via surcharges and other pricing tools.<\/p>\n
\u201cWith bunker prices pushing \u200cfuel surcharges higher, surpassing the pandemic peak cannot be ruled out,\u201d Sand said of the China to East Coast \u2060container spot rate. \u2060A new record would most likely come this month, with the traditional Golden Week volume spike driven by shippers, including Walmart and Amazon.com rushing goods out of China before factories close in early October for a mandatory holiday break, he said.<\/p>\n
Week-over-week spot rates from Shanghai to New York jumped nearly 7 percent to $10,394 per 40-foot container, according to the Drewry World Container Index (WCI) data on Thursday.<\/p>\n
Drewry also expects Golden Week shipments to send the rate higher.<\/p>\n
Drewry and Xeneta use different methodologies for their data on spot rates, which, depending on market dynamics, can apply to around half of cargo on the water.<\/p>\n
Drewry\u2019s WCI Shanghai \u200bto New York spot rate \u200bpeaked at $16,000 early in the pandemic when homebound consumers were using federal incentive money to splurge on furniture, big-screen televisions and home exercise equipment.<\/p>\n<\/div>\n