BAROMETER. The shipping companies saw another fall in spot rates in February despite wide-ranging blank sailings. The conflict in Iran will have a major impact on the market in the weeks to come.
Conflict in Iran
As in January, the shipping companies had a morose month in February which failed to stop the downward slide in freight rates. On the last day of the month, however, an event occurred which is likely to change matters. On 28 February, the United States and Israel launched a military operation against Iran which was given the name Roaring Lion by the Israelis and Epic Fury by the Americans. Iran riposted with missile strikes against US bases. The Guardians of the Revolution also ordered commercial shipping to cease using the Strait of Hormuz, a strategic shipping route.
It is too soon still to estimate the likely duration of the conflict and evaluate the disruption it is generating but it is clear that it will have a big impact on logistics chains and the price of transport in the first half.
The month of February was marked by a string of spot rate reductions on the major east-west trade routes despite a record level of blank sailings, which were timed to coincide with the resumption of production at Chinese factories after the Lunar New Year festivities. We can, therefore, expect a battle between cargo expeditors and the shipping companies for space on ships leaving...
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