Shipping stocks and freight rates rally on Red Sea turmoil
Oil went higher after jumping more than 3% yesterday
Tensions in the Red Sea are rising, pushing up prices Thursday for several things related to shipping.
Container carriers' shares advanced. Maersk rose as much as 3.7% to hit a five-month high after Bank of America upgraded the stock. Hapag-Lloyd rallied too, as did the shares of Israeli carrier Zim and China's Cosco.
European natural gas futures rose as the recent flare-up of geopolitical strife in the Middle East stoked concern over supplies. Oil went higher after jumping more than 3% yesterday as supply disruptions in Libya and attacks in the region raised worries for the key crude exporters.
Keep updated, follow The Business Standard's Google news channel
Container rates are also heading higher. Bloomberg Intelligence senior logistics analyst Lee Klaskow, in a research note Wednesday, said transpacific rates jumped 56% from a week earlier to $2,769 for 40-foot container, based on the Drewry Hong Kong-Los Angeles benchmark.
Freightos data shows spot rates from Asia to the US East Coast and Europe surging over the past week.
Container ships are hauling the equivalent of about 4 million 20-foot steel boxes the long way around Africa in order to avoid attacks by the Houthi militants in the Red Sea, according to Clarkson Research Services.
The price hiking is spreading to other modes of transcontinental freight. Rail rates from China to Europe are marching higher, too, according to a LinkedIn post on Wednesday from New Silk Road Intermodal.
"It is expected that the spot freight rates for Europe-bound service in January will exceed 20% compared with last month. At present, platforms such as Chengdu and Chongqing have a competitive advantage in booking prices, and the spaces of early January are almost fully booked," New Silk Road Intermodal said in the post.
