- The rates were largely heard around $17,000-$19,000/FEU for Southeast Asia to East Coast North America and $15,000-$17,000/FEU to West Coast North America.
- Trans-Pacific rates from China reach a new high in the pre-LNY demand rush
- Southeast Asia spot market lacking liquidity with all ships booked out
Container freight prices, including premium service costs, increased this week on trans-Pacific trade lanes from North Asia to North America, owing to widespread restocking by shops ahead of the Lunar New Year, which begins on February 1 and is defined by operational slowdowns in East Asia as reported by S&P Global.
Forced shipping schedules
Available empty containers and space on ships leaving Asia in January were limited by cascading cancelled sailings across global networks as heavy port congestion forced shipping lines to reschedule their trans-Pacific voyages.
Premium rates China to West Coast North America were mostly around the $18,000/FEU level, but a handful of shippers with large volumes and urgent requirements paid as much as $25,000/FEU for delivery to West Coast ports, firmly establishing a return to the previous peak from August-September 2021.
“The cancellations are unreal: 48% of sailings to Los Angeles/Long Beach have blanked,” a US-based freight forwarder said.
“There just isn’t any space and rates are premium only, that or nothing.
This means for certain that not everything can get out before Chinese New Year.”
Premium rates hold steady
Container premium rates on Southeast Asia to North America trade lane remained unchanged due to the unavailability of space in the run-up to Lunar New Year.
The rates were largely heard around $17,000-$19,000/FEU for Southeast Asia to East Coast North America and $15,000-$17,000/FEU to West Coast North America.
“The rates are already so high, there is no room for any increases.”
An outbreak of COVID-19 in a district of Ningbo, China, has resurrected the spectre of destabilizing Chinese port closures that shook the industry last year, particularly as the highly contagious omicron variant spreads to many different parts of the world.
“The consequences might be worse,” the source said.
The disruptions in China will never stop.
Asia-to-Europe base rates soften
FAK bookings made up the lion’s share of market activity this week, although some sources noted premiums of $2,000/FEU were applicable for prompt loading and guaranteed capacity.
Despite bullish sentiment during the week, base rates on the Far East Westbound routings slid from one-month highs amid a slight increase in available capacity ahead of the Lunar New Year celebrations.
Platts Container Rate 1 – North Asia to North Continent – fell $300/FEU to $15,700/FEU, while PCR11 – North Asia to the UK – dropped by $500/FEU to $17,000/FEU, tightening the spread with rates to the continent to $1,300/FEU.
Most sources expect rates to soften in the coming weeks as renewed lockdowns in China and the upcoming Lunar New Year holiday put a damper on demand, which could serve to eliminate premium surcharges for the time being.
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Source: S&P Global
