Solid growth in demand for containerized cargo combined with attacks by the Houthi movement on civilian shipping in the Red Sea has driven freight rates up sharply, said Rolf Habben Jansen, chief executive of Hapag-Lloyd, at a press briefing.

”We’ve experienced solid demand, especially since May 1, which is meeting limited available capacity, also due to the situation in the Red Sea, and therefore spot rates are increasing,” Habben Jansen said according to Reuters.

Hapag-Lloyd, the world’s fifth largest container line, forecasts containerized cargo demand growth of 3-4% in 2024, but it could also end up higher as demand for trans-Pacific cargo is quite high due to restocking.

The Red Sea challenge is also having a major impact, and Habben Jansen estimated that 5-9% of global container capacity is tied up in the diversion of shipping traffic south of Africa.

According to the Freightos index, which measures freight prices on 12 major trade routes, spot rates have increased by as much as 40% in the last six weeks, Reuters reports.

English edit: Catherine Brett