Although current freight rates are declining and forwarders anticipate a slow peak season, long-term freight rates to Australia and New Zealand have achieved “new highs”, as reported by The Loadstar.
Long-term contracts
According to Xeneta, while in recent months the average rate for new long-term contracts has stabilised, they are replacing older ones which were at much lower levels.
The company explained: “For example, on by far the biggest trade into Australia and New Zealand, the average long-term rate from the Far East on 1 July stood at $7,600 per feu, 375% more than shippers were paying in July 2019, and more than twice as high as in July 2021.”
David Aherne, MD and founder of Across the Ocean Shipping, said the market was softening as consumers adjusted spending more towards travel and entertainment.
He told The Loadstar: “I expect a sluggish peak season this year.”
We saw a lot of companies panic with space issues last year and build up inventory which they have carried over.
Blank sailings
While demand has slowed, Mr Aherne said shipping lines were holding up rates with blank sailings.
“This is again showing how the lines control shipping rates globally and influence the ocean rates without regulation,” he claimed.
Nevertheless, Neolink director Sean Crook said spot rates had been falling in recent months.
Rates increased from around $2,000 per teu to Australia in April/May 2021, to just under $5,000 per teu at their peak in January.
“However, since the market peak in January, we have seen a steady decline to around $3,000 per teu, depending on service and port.”
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Source: The Loadstar
