Container spot rates from Asia to Europe appear to have reached their elevated peak ahead of Chinese New Year, but transpacific rates are still in the ascendance.
Spot Rates Spike
Drewry’s WCI Asia-North Europe component edged up just 1% this week, for an average of $4,984 per 40ft, while Asia-Mediterranean rates were also up 1%, to $6,365 per 40ft.
Nevertheless, spot rates for the two trade lanes are up 186% and 129% respectively on the same week of last year, reflecting the Red Sea crisis-induced huge rate hikes of the past few weeks.
Anecdotal reports to The Loadstar suggest carriers are softening their stance on contract allocation coverage and release of equipment, albeit that one shipper contact reported that due to a shortage of haulage in Dalian, China, he had been unable to collect empty containers.
Chinese New Year commences on 10 February, whereafter demand is expected to be much weaker, for North Europe in particular, with for instance AGX, a Singapore-based collaboration platform for forwarders and importers, predicting a significant drop in spot rates.
Drop in Demand
Indeed, Vespucci Maritime’s Lars Jensen believes that after CNY, not only will there be a drop in demand, but vessels and equipment flows will begin to get back in sync from their revised Cape of Good Hope routings.
“This will still mean rates are much higher than pre-crisis because the longer routes will soak up large amounts of capacity and carry extra cost, but I expect the spike in spot rates to abate somewhat,” said Mr Jensen.
Elsewhere, on the transpacific, the WCI recorded a 13% week-on-week jump in its Asia to US west coast spot, for an average of $4,344 per 40ft, while for the US east coast, there was a 9% increase, taking the spot rate to $6,143 per 40ft.
This represents a massive year-on-year increase of 110% for west coast ports and a 90% increase for the east coast.
Notwithstanding a potential dip in spot rates after CNY, it seems that most of these increases are baked into the transpacific market, which is unfortunate timing for BCOs about to tender for new contracts.
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Source: The Loadstar
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