SIMIC

At the end of June, rates from China to North Europe on contracts of at least three months stood at US$2,043 per TEU, but just a day later the rate jumped to $3,168 per TEU, reports IHS Media.

At the end of July, there was another jump, with the long-term rate rising to $3,340 per TEU, 343 per cent above the level at the same point in pre-pandemic 2019.

The spot market rate increase has been even more spectacular. Since the end of March, the China-North Europe spot rate has risen by close to $4,000 per TEU, Xeneta data show. As of August 4, average pricing on contracts of 30 days or less was up almost 900 per cent year over year at $7,693 per TEU.

"A lot of shippers are signing longer-term contracts, many for three months, because they don't see any relief from the high spot rates and they have no real alternative to ocean," said Xeneta vice president Michael Braun.

"While the larger shippers have accepted annual rates, many of the smaller shippers are loading in three-month contracts in the hopes that rates will come down later his year," he said.

Said DSV Panalpina chief financial officer Jens Lund: "Shippers are concerned about the volume they will need this year and whether it can be moved. But they are being realistic about it and say, 'We have Christmas and peak season coming up, so we will just have to pay and then deal with our customers later,' so they pay up and we move the cargo."