In the second week of January, the average price of a 40-foot container was about $5,400, up from $1,500 a week earlier, according to the container logistics and operations online platform of Germany's Essejet. The number of cargo ships passing through the Suez Canal, which connects the Mediterranean and Red Seas, fell by 30 percent and the number of oil tankers by 19 percent in the 10 days to Jan. 7, according to Allianz Trading, an international insurer. As one of the world's busiest shipping routes, the Suez Canal handles one-third of global container traffic and 40 percent of trade between Asia and Europe. The Suez Canal also connects major Chinese investment projects in Egypt and the Middle East. China has called on all parties to work together to restore and ensure the safety of the shipping lanes in the Red Sea to avoid disrupting the global supply chain and international trade order.
"We will also strengthen coordination with relevant departments, closely track relevant developments, and provide timely support and assistance to foreign trade enterprises," Ministry of Commerce spokesman He Yadong said at a press conference on Thursday. The report quoted Ulf Bergman, senior economist at London-based data platform Shipfix, as saying that demand for containers in China has risen significantly ahead of the Lunar New Year, and increasing the use of rail and air transport is "clearly an option." However, the use of air and rail transport is more suitable for high-value goods. Liyang Huang, senior economist for Asia Pacific at Allianz Trading, said other modes of transport are far from enough to make up for the freight volume by sea. "The growth in rail freight during the pandemic suggests that China-Europe trains may be seen as a viable option for the supply chain, but the war in Ukraine has put the China-Europe trains [passing through Russia] at risk," she said.
Analysts say global trade and supply chains have experienced several rounds of "shocks" from the coronavirus pandemic to the war in Ukraine to the recent Red Sea attacks, and companies are increasingly aware of the need to have contingency plans in place. "Our customers are actively looking for alternative solutions, such as sea and air transport to Europe via Dubai, rail transport to Europe, and direct air services to Europe," said Catherine Qian, head of digital marketing at an international logistics group based in Taipei. "It is worth noting that customers are showing flexibility and are now also accepting longer transit times around the Cape of Good Hope."
