The ongoing impact of the conflict in the Red Sea, spiralling freight rates and congestion across global ocean container supply chains have resulted in record-high carbon emissions in the third quarter (Q3) of 2024.
That’s according to the Xeneta and Marine Benchmark Carbon Emissions Index (CEI), which measures carbon emissions across Xeneta’s top 13 ocean container shipping trades. The index hit 107.9 points in Q3 – the highest on record and up 12.2% compared to a year ago before the Red Sea crisis.
Xeneta’s Emily Stausbøll explains that the CEI is based on Q1 2018, meaning any reading above 100 indicates carbon emissions per tonne of cargo carried are above levels from that period. Q3 is only the second time the 100-point mark has been breached, with the first time being Q1, in the immediate aftermath of escalation in the Red Sea.
In Q3, six of the 13 trades were below the 100 point benchmark – indicating a lowering of emissions per tonne of cargo carried compared to Q1 2018 - while seven scored above 100.
The effect of the crisis on the CEI is most clearly evident in a year-on-year (y-o-y) comparison, with the four trades most impacted by diversions around the Cape of Hope seeing emissions increase by more than 30% in Q3 2024 compared to Q3 2023 (the two fronthauls and two backhauls connecting the Far East with North Europe and Mediterranean).
The biggest y-o-y increase is found on the Far East to Mediterranean trade, up 60.1%, while the backhaul is up 46.3%.
The trade from North Europe to South America East Coast has also seen a y-o-y CEI increase of more than 30% in Q3, despite not transiting the Red Sea and Suez Canal, she points out.
“Conversely, five trades have seen lower emissions compared to Q3 last year – and unsurprisingly these are trades not impacted by longer sailing distances around Africa. The backhaul from the US East Coast to the Mediterranean has seen by far the biggest year-on-year drop in Q3, down 26.5%.”
Comparing Q3 with Q2 provides insight into the evolving impact of the Red Sea conflict on the CEI during 2024, she adds.
“Emissions on the fronthaul from the Far East to Mediterranean (the trade with the biggest y-o-y increase) actually fell in Q3, down by 3.5% from Q2 to 140.6 points, while the backhaul increased a further 10% in Q3 to 164.3 points."
The biggest quarter-on-quarter increases in Q3 are 40.3% from the US West Coast to Far East and 19.7% from the US East Coast to North Europe.
The deterioration on the Transatlantic backhaul is partly due to a 1 250-TEU decrease in the average capacity of ships deployed on this trade, with smaller ships being less efficient when it comes to carbon emissions, Stausbøll explains.
Another reason for higher emissions on backhaul trades is an increase in speed as carriers rush to get their ships back for their next scheduled sailing. Several trades have seen average sailing speed reach multi-year highs. For example, from North Europe to the Far East, the average sailing speed rose to 16.2 knots in Q3, the highest it has been since Q3 2022. This was also the last time average sailing speed from the US West Coast to the Far East was higher than in Q3 2024.
“This is an example of how reducing carbon emissions falls down the priority list at times of increasing congestion, tightening capacity and spiralling freight rates. When shippers are scrambling to secure capacity and carriers are financially incentivised to provide it, carbon reduction is not front of mind for either party.”
