Freight costs—an important component of the total cost of solar installations—have risen week-on-week on shipping routes from the Far East following military strikes in the Middle East, according to new analysis from Xeneta.
The Norway-headquartered maritime and freight analytics company said the latest developments highlight how quickly a regional crisis can ripple through global supply chains and drive up freight rates.
According to Xeneta’s latest data, the market average spot rate from the Far East to the U.S. West Coast reached $2,123 per forty-foot equivalent unit (FEU) on March 5, up from $1,883 per FEU on February 26. On the Far East–U.S. East Coast route, the average spot rate climbed to $2,870 per FEU, compared with $2,659 per FEU the previous week.
Similar increases were also recorded on Europe-bound routes. Freight rates on the Far East–Mediterranean trade lane rose from $3,335 per FEU last week to $3,570 per FEU on March 5. Meanwhile, the Far East–North Europe route saw spot rates increase from $2,224 per FEU on February 26 to $2,338 per FEU.
In contrast, rates on the North Europe–U.S. East Coast route remained relatively stable, standing at $1,451 per FEU on March 5, compared with $1,487 per FEU the week before.
Additional data from Xeneta shows that 147 container ships are currently sheltering in the Arabian Gulf, unable to leave due to the risks associated with sailing through an active conflict zone.
Peter Sand said global supply chains continue operating even during severe crises, noting that more vessels are still heading toward the Gulf region.
“The question is what ports they will be diverted to and where containers will be offloaded,” Sand said. “Alternative ports are not equipped to handle a sudden increase in volumes arriving against chaotic schedules, so severe congestion is expected.”
He added that while the largest increases in freight rates have been recorded on routes closest to the conflict’s epicenter, early Xeneta data indicates that ripple effects are already spreading further afield. For example, average spot rates from China to the UK have risen 9% compared with February 26.
Separate analysis from price reporting agency OPIS suggests that the military action has so far had limited direct impact on Chinese solar module and cell trading. However, it has already affected container shipping—currently the primary transportation method for solar products across the region.
