Container traffic from China to North America set a monthly record in June as shippers looked to get ahead of supply chain disruptions closer to the holiday retail season.
An eastbound total of 1.36 million twenty-foot equivalent units made June the eighth-highest month ever, behind only the all-time volumes seen amid the COVID-19 bottlenecks of late 2020 and 2021.
Attacks on the Mideast’s Red Sea shipping route by Houthi rebels based in northwestern Yemen continue to cause global supply chain disruptions. Vessel operators are taking longer routes around Africa, snarling China port traffic and pushing up rates.
“Conflict in the Red Sea has brought a major shift in the traditional seasonality of ocean supply chains, with concerned shippers rushing to import as many goods as they can earlier in the year,” said Peter Sand, chief analyst of Oslo-based Xeneta, which tracks shipping data.“Shippers assessed the impact of the Red Sea conflict on ocean supply chains and are not prepared to take the risk of repeating the chaos of the pandemic years, meaning we have seen record-breaking volumes on major fronthaul trades out of China ahead of the traditional peak season in Q3.”
June volume of 800,000 TEUs moving from China to North Europe was the highest on record, according to Xeneta.
Shipping spot rates tracked June’s record volumes from the Far East to the U.S. West Coast and U.S. East Coast, soaring by 144% and 139%, respectively, between April 30 and July 1, according to Xeneta data. Spot rates to North Europe increased 166% during the same period.
The record volumes in May and June contributed to severe congestion at ports in Asia and to the spike in rates, Sand said, as shippers spent more to manage risk in their supply chains. “We have seen shippers importing Christmas goods as early as May because hindsight is a luxury they do not have, they needed to take immediate action.”
But the record demand may have peaked, as average spot rates from the Far East to U.S. West and East Coast ports have dropped by 17% and 3.2%, respectively, since July 1. Average spot rates from the Far East to North Europe have been steadier, off 1.6% since July 31.
Sand said that would presage lower container volumes during the traditional peak season in July and August.