- Container spot freight rates took another pummelling this week with a raft of double-digit week-on-week.
- Since the end of March, south-east Asia-US west coast spot rates have fallen by 62%.
- The weaker market has also led to a normalization of spot rates between different Asian locations.
According to the Freightos Baltic Index (FBX), the transpacific eastbound Asia-US west coast trade dropped 10% to $4,314 per 40ft today, some 80% lower than the same point last year. FBX lead analyst Judah Levine noted that the shift of US import volumes from west to east coast ports was propping up the spot rates for boxes moving via the Panama Canal.
Hitting a Low Ebb
The significant shift of volumes and congestion to the east coast has kept Asia-US east coast prices from falling as dramatically, with rates “only” half their level at the start of the year. In fact, in today’s FBX reading, Asia-US east coast spot rates are actually up 4% week-on-week to $8,704 per 40ft – although there is some divergence between the indices, with Drewry’s World Container Index (WCI) showing a 5% weekly decline on its Shanghai-New York leg to $8,477 per 40ft. China-US west coast rates have declined 49% while those of south-east Asia-US west coast spot rates have fallen by 62%.
Xeneta chief analyst Peter Sand said “Spot prices from Asia have, to be blunt, been falling considerably since May this year, with increasing rates of decline over the last few weeks”. “We have to remember though, those rates are dropping from historical highs, so it certainly won’t be panic stations for the carriers just yet” he added.
A Dire Situation
A similar sentiment appears to underpin the Asia-European trades, which this week performed even worse where Asia-North Europe saw a 14% decline to $7,854 per 40ft and Asia-Mediterranean was down 10% to $8,48 per feu, according to the FBX. There seems little prospect of demand returning, with July volumes on Asia-North Europe declining 4% year-on-year and the outlook remaining bleak.
Head of ocean freight at DHL Global Forwarding, Markus Panhauser, said he expected carriers to swiftly curtail capacity, and noting a 40% increase in the number of blank sailings announced for October, added that this could prove problematic for European exporters. “With all the service blankings, I fear we will be facing another empty container shortage crisis…” he commented.
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Source : TheLoadstar