Shipping around the Cape of Good Hope is at a record high and capacity is tight.

Linerlytica's latest report, published on December 26, said that the Suez Canal was closed for seven days due to the grounding of the Ever Give, with fewer than 20 ships diverted. The latest diversion amounts to 1.77 million TEUs, and Linerlytica warned that a capacity crisis could be looming as ships that should be returning to Asia via the Suez Canal from Europe and the East coast of the United States are delayed by two to three weeks.

As of now, most ships on the Asia-Europe and U.S. East Coast route via the Suez Canal have continued their detour to Africa, and carriers are still assessing the security risks of resuming the Red Sea route because the Houthis have been attacking ships on the route. The situation, which coincides with the usual peak in freight traffic ahead of the Lunar New Year, which starts on February 10, 2024, has filtered into the freight market, causing the Shanghai Container Freight Rate Index (SCFI) to rise 15 percent on December 22. Asia-nordic freight rates rose almost 46 per cent week on week to $1,497 /TEU, while Asia-Mediterranean freight rates rose nearly 31 per cent to $2,054 /TEU. Linerlytica expects rates on the Asia-Northern Europe route to top $2,000 /TEU this week, with further increases to come as carriers take advantage of a looming shortage of space in January.

Trans-pacific rates have been affected by turbulence in the Red Sea and an expected capacity shortage in January, particularly in the eastern United States, which has been affected by restrictions on the Panama Canal and the diversion of the Suez Canal to the Cape of Good Hope. As a result, freight rates from Asia to the US East Coast rose 6% to $2,982 /FEU. In contrast, freight rates from Asia to the West Coast of the US rose just 2 per cent to $1,855 per FEU. "In contrast, fares to the West Coast have not increased as much and capacity on all routes remains open as existing capacity has not been affected by the Suez Canal diversion, although carriers may still shift some capacity to Europe due to the shortage of space," explains Linerlytica.