Xeneta: Shipping to the UK from the Far East is considerably more expensive than going to the continent
The proximity of the main UK ports and the main ports in North Europe means that historically freight rates to these areas have been the same; however, this relationship has changed over the past year. In a post-Brexit world, shippers are paying a considerable premium for UK ports compared to North Europe. This is the case both on the short- and long-term contracts.
As of mid-February, the short-term market costs an average of USD 15350 to get a container from the Far East to the UK, which has not been under 15000 since mid-September 2021.
Shipping into a port south of the English Channel would save you more than USD 950 per container, as spot rates from the Far East to North Europe never passed the USD 15000 per FEU mark.
Shipping to the UK from the Far East is considerably more expensive than going to the continent.
This premium is, in fact, lower than it has been for many months, having topped at USD 1995 per FEU in March 2021. In 2021, you would have saved USD 1400 per FEU on average into North Europe instead of the UK, whereas in 2019 and the first half of 2020, the difference in rates was non-existent at USD 70 per FEU.
On the long-term market, the premium for going to the UK has jumped considerably as long-term rates to the UK rose by close to USD 2 000 per FEU as we entered the new year, while those from the Far East to North Europe only increased by USD 200.
Rates for long term contracts signed in the past three months stand at USD 11359 per FEU from the Far East to the UK and USD 9408 for those going to North Europe.
Of the three ports under Xeneta’s definition of the main UK ports, the lowest freight rate on both the long and short-term market is for containers going to Felixstowe. At the other end of the scale, London Gateway is by far the most expensive on the long-term market (USD 13400 per FEU) but is still cheaper than Southampton on the spot market, as here rates lie at USD 15800.
Want to Learn More?
On-demand webinar (live on Feb 22): Know your position in the market post-Lunar New Year
https://www.xeneta.com/webinars/state-of-the-market-ocean-freight-february-2022-0
Key talking points from the webinar:
- With slow resolutions into the hinterland logjam in the states and equipment shortages everywhere, how will capacity be impacted in the coming months?
- Despite the dip in long-term contracted ocean freight rates by 3.6% in January, rates stand 98.1% up year-on-year, demonstrating the commanding position carriers continue to occupy in shipping negotiations. As the logistics chain remains stressed, what can shippers expect in the coming weeks?
- How has Beijing’s lockdown strategy affected global container movements and port operations?
- Market disruptions caused by USWA labour negotiations
- Rate analysis on major corridors
- And MUCH MORE
