Red Sea crisis: China firms eye Plan B ahead of Lunar New Year as container prices soar further
- Average rate during the second week of January for shipping a 40-foot container between Europe and China was about US$5,400, up from US$1,500 a week earlier
- Demand for containers in China has increased ahead of the Lunar New Year, with firms seeking to avoid the Red Sea following recent attacks by Houthi militants
Shipping prices between Europe and China have continued to soar amid the Red Sea crisis, weighing on China’s fragile export growth and pushing its companies to seek contingency plans to fortify their supply chains ahead of the Lunar New Year.
The average rate for the second week of January was about US$5,400 for a 40-foot container, up from US$1,500 a week earlier, according to Container xChange, an online platform for container logistics and operations in Germany.
In the 10 days leading up to January 7, the number of cargo ships passing through the Suez Canal – which connects the Mediterranean Sea to the Red Sea – decreased by 30 per cent for cargo and 19 per cent for tankers, figures from international insurance company Allianz Trade showed.
As one of the busiest global shipping routes, the waterway accounts for one-third of worldwide container traffic and 40 per cent of trade between Asia and Europe, while also connecting China’s major investment projects in Egypt and the Middle East.
03:21
US-led coalition strikes Iran-backed Houthi fighters in Yemen