Container shipping from China to North America and Northern Europe continued to break records in June 2024, as importers rushed to secure their supply chains amidst global turmoil caused by the Red Sea conflict. According to the latest data published by Xeneta on August 7, 2024, a staggering 800,000 TEU were shipped from China to Northern Europe in June, marking the highest monthly volume ever recorded on this route.
Although container traffic from China to North America did not reach a new historical high, it still recorded the highest volume ever for the month of June, with 1.36 million TEU shipped. This makes June 2024 the eighth-highest month on record, surpassed only by the extraordinary volumes shipped during the peak of the Covid-19 pandemic in late 2020 and 2021.
Peter Sand, Chief Analyst at Xeneta, explained that "the conflict in the Red Sea has led to a significant shift in the traditional seasonality of maritime supply chains, with concerned shippers accelerating the import of goods to avoid a repeat of the chaos experienced during the pandemic years. We have seen record volumes on the main routes from China, preceding the traditional peak season of the third quarter."
The record volumes recorded in June coincided with a surge in average spot rates on routes from the Far East to the United States and Northern Europe. Xeneta's data shows that spot rates to the US West and East Coasts increased by 144% and 139%, respectively, between April 30 and July 1. During the same period, spot rates to Northern Europe rose by 166%.
Sand commented, "Shippers wanted to protect their supply chains, but this came at a high price. The massive volumes shipped in May and June contributed to severe congestion at Asian ports and a dramatic spike in rates. Some shippers imported Christmas goods as early as May, as they couldn't afford the luxury of waiting and had to act immediately."
Despite the records achieved, Xeneta reports that some signs suggest the demand for container shipping from China to North America and Northern Europe may have peaked. Average spot rates from the Far East to the US West and East Coasts have begun to decrease, dropping by 17% and 3.2%, respectively, since July 1. Rates to Northern Europe have held up slightly better but still fell by 1.6% as of July 31.
Sand concluded, "There is a clear correlation between record volumes and spot market trends on the main routes from China to North America and Northern Europe. If we are already seeing a softening in spot rates in August, this would suggest that we have already seen the peak of container shipping demand and that volumes will be lower in July and August, during what would typically have been the peak season."
