HK port congestion likely to drive up freight rates

Container spot rates are at a new all-time high at the end of the second quarter.

Freight rates will likely increase in the second half of the year as port congestion is expected to worsen, particularly in major European and US ports.

According to Jefferies, this comes as the Yantian port returned to its full operations.

“Port congestion will be a freight rate driver in 2H21, which we expect will worsen especially in container ports at major European and US ports as Yantian port returned to full operations,” the report read.

Container spot rates rose to 1% week-on-week, a new historical high. This is 47.3% higher than the rates recorded in end-March.

“Yantian port vessel delays are easing with Maersk estimating 'upwards of 4 days delay' after resuming full operations since 24 June with 4 to 5-day delay in Nansha as cargo was diverted,” it added.

“However, we expect the global port congestion could worsen as the delayed journey will lead to further congestion in key European and US ports upon arrival.”

It added Maersk is already adjusting its Asia-US West Coast network with vessels slide up to three weeks, whilst Hapag Lloyd announced plans to skip Rotterdam due to congestion.