When Houthi attacks on commercial shipping in the Red Sea began escalating in late 2023, the prevailing view among the freight forwarders and shipper-side logistics teams we spoke to was that the rate spike would be sharp but short. Six months later, that view has largely been abandoned. Spot rates on the Asia–North Europe lane spent most of the first half of 2024 well above their pre-disruption baseline, and the planning conversations happening inside retailers in June and July are increasingly built around the assumption that the elevated rate environment is structural rather than temporary.

What the rates actually did

The headline numbers, by mid-year, looked like this: spot rates on the Shanghai–North Europe benchmark were sitting north of $4,000 per FEU through most of Q2, with peaks during the worst weeks pushing materially higher. Asia–US West Coast and Asia–US East Coast lanes moved in sympathy, though less dramatically — the US-bound traffic doesn't route through Suez, but capacity reallocation by carriers absorbs spare equipment that would otherwise be available globally.

For context, pre-disruption spot rates on the same lanes were in the $1,200–1,500 per FEU range. The 2024 elevated environment is therefore something like a 2.5–3x multiple of the baseline, sustained over six-plus months.

That sustained-elevation pattern is what has shifted shipper psychology. Through Q1, most of the conversations we had with retail supply chain leaders treated the situation as a transitory shock — annoying, expensive, but expected to normalize. By June, the same operators were describing it as the new operating environment.

Why the recovery never came

Several dynamics, layered:

The Red Sea routing situation has not meaningfully improved. Most major carriers have continued to route Asia–Europe vessels around the Cape of Good Hope, adding roughly 10–14 days to transit times and absorbing capacity that would otherwise be in the spot market. The math is straightforward: longer voyages mean fewer rotations per vessel per year, which means effective capacity has shrunk even though the fleet hasn't.

Demand recovered earlier and more strongly than carriers were positioned for. The 2023 demand environment had carriers expecting a slow Q1 and Q2 2024. The actual demand — driven partly by pull-forward ahead of the US east coast labor situation, partly by inventory rebuilds at retailers who got caught short in 2023 — was meaningfully stronger.

Carrier discipline has held. The lessons from 2022 — when the post-COVID rate collapse erased the previous boom's profits — appear to have been internalized. Capacity additions are being staged carefully, blank sailings have been used aggressively to manage spot rates, and the alliance structures have shown more cohesion than the conventional wisdom expected.

What shippers are doing about it

The behavior shifts across the retailers we spoke to in June and July fall into a few patterns:

• Longer contract horizons. A year ago, many shippers were trying to renegotiate annual contracts mid-year as spot rates fell below contract rates. In 2024, the same shippers are trying to lock in multi-year arrangements at rates that would have seemed expensive eighteen months ago but now look like protection.
• Nearshoring conversations are accelerating. Mexico-origin sourcing, already trending up through 2022 and 2023, is getting fresh internal attention. The math is more compelling when ocean freight is structurally elevated.
• Inventory positioning is shifting earlier. Several retailers told us their 2024 holiday inventory was on the water four to six weeks earlier than the prior year's equivalent. The cost of carrying inventory longer has been judged less than the cost of being short during peak.
• Pricing the freight risk into contracts. Shippers are increasingly insisting on fuel-and-disruption surcharge clarity in their carrier contracts rather than accepting open-ended pass-throughs.

The other variables in the H2 picture

A few wildcards that the operators we spoke to are tracking:

The US east coast and gulf port labor contract situation. ILA negotiations have been a slow-motion source of anxiety through 2024, with the master contract expiring at the end of September. Most shippers are planning for at least some disruption, with the more cautious building two-to-three weeks of inventory cushion specifically for that risk.

The hurricane season's impact on Gulf and East Coast operations. Atlantic basin forecasts coming into 2024 were on the more active end of the historical range.

And, on a longer horizon, whether the Red Sea situation itself materially changes. Most of the supply chain leaders we spoke to said they would need to see sustained safe transit for several months before re-routing — and that the savings would have to be reflected in carrier rates, which would lag.

The summary from one head of logistics at a mid-market home goods retailer: "We're not budgeting for things to get better. If they do, that's upside. We're budgeting for this to be the floor."