A rates war on the Asia-US West Coast tradelane is under way, as newcomer transpacific carriers offer lower rates to gain market share, reports The Loadstar.
Intense Rate Competition
According to Linerlytica’s report this week, while the Shanghai-US West Coast rate on 23 August stood at $5,955 per 40ft, down 10% from the previous week, actual rates are more than $1,000 lower.
Taiwanese intra-Asia carrier TS Lines is one of these transpacific newcomers, having joined SeaLead Shipping (itself a returnee to the transpacific) Asia-US West Coast service. Last week, TS launched a standalone Asia-USWC service, the AWC2, connecting Nansha, Shekou, Kaohsiung, Xiamen and Long Beach.
And Hede (Hong Kong) International Shipping, also newcomer to the transpacific, this month added capacity to its China-USWC service, having chartered two 2,700 teu ships, Pona and Posen, for three-and-a-half years, demonstrating commitment to the trade.
Hede, a Chinese feeder operator owned by Tangshan Port Group, entered the transpacific trade in March, with Shanghai-Los Angeles services.
Linerlytica suggested the outlook over the coming month was mixed, with carriers hoping the diversion of cargo away from the US east coast ahead of a potential dockers’ strike in October could boost the market.
Meanwhile, the short-lived Canadian rail strike last week did not result in any material increase in port congestion, although Pacific north-west ports are struggling to cope with increased inbound rail volumes.
There are, however, signs that vessel utilisation on Asia-US East Coast routes is declining, as shippers divert containers to avoid any disruptions from industrial action on the US east coast. This could help box line attempts to hike Asia-US west coast rates in September, their having failed to do so this month.
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Source: The Loadstar
