Rates Hike As Carriers Begin To Benefit From Blank Voyages

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Credit: Andy Li/Unsplash
  • “However, for weeks 51 and 52, carriers have scheduled no blank sailings on Asia-North America west coast, which is a reflection of carrier indecision on how to approach the potential pre-Chinese New Year rush.”
  • “It appears more to be a wait-and-see approach, in terms of whether there will be a seasonal demand spike,” he added.
  • Asia-US east coast prices on Freightos FBX climbed 2% week on week, to $5,767 per 40ft, which is 64% lower than rates for this week last year.

Despite persistently weak demand, spot container freight rates on the largest deep-sea trades increased this week, suggesting recent capacity reductions have started to reverse months of price decline as reported by The Loadstar.

Prices increased 

The Asia-US west coast prices increased 11% week over week to $2,763 per 40ft, which is around 80% less than they were at this time last year, according to the Freightos FBX index.

Ocean rates out of Asia were, overall, stable once more this week, according to Freightos lead analyst Judah Levine, “though prices from Asia to the US west coast ticked up and are now level with prices in early October, suggesting the sharp drop off that started this summer “.

Capacity reductions

Sea-Intelligence data, on the other hand, indicates that price levels may be impacted by recent and upcoming capacity reductions on the transpacific, up until the end of the year.

According to Alan Murphy, CEO of Sea-Intelligence, “what we basically see here is that the number of blank sailings have been pushed up dramatically on the transpacific, but not so much on Asia-Europe.”

“There have been 34 additional blank sailings on Asia-North America west coast, and 16 on Asia-North America east coast. And, for the former, carriers have announced an extra 7-11 blank sailings in all but five weeks of the analysed period.

“However, for weeks 51 and 52, carriers have scheduled no blank sailings on Asia-North America west coast, which is a reflection of carrier indecision on how to approach the potential pre-Chinese New Year rush.”

“It appears more to be a wait-and-see approach, in terms of whether there will be a seasonal demand spike,” he added.

Ocean rates elevated 

Asia-US east coast prices on Freightos FBX climbed 2% week on week, to $5,767 per 40ft, which is 64% lower than rates for this week last year.

“The latest National Retail Federation data on US container imports estimate that October volumes were about even with September, though 9% lower than last October,” Mr Levine explained.

“November and December volumes are projected to dip 5% to the lowest level since February 2021, but would still represent double-digit increases in those months in 2019.”

“The relatively strong volumes – together with congestion and reductions in capacity – are likewise still keeping ocean rates elevated compared with 2019, with ex-Asia rates to the west coast 81% higher than in 2019, east coast rates more than double, and prices to Europe more than triple November 2019 levels.”

Freightos’s Asia-North Europe spot rate increased 3% to $4,959 per 40ft, which is 65% lower than rates for this week last year.

Weakening demand

According to market sources, however, Asia-North Europe rates are in something of a flux.

One major freight forwarder told The Loadstar the steepness of the recent rate decline was “unprecedented”, and that he was now being quoted rates of $1,700 to 1,800 for shipments from Shanghai to Rotterdam, and that shippers on this trade could expect to see more drops.

“For the remainder of this quarter, it’s only going to go down further, in my opinion. There’s nothing in sight that would change the dynamic weakening of consumer demand,” he added.

 

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Source: The Loadstar

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