- Labor disruption involving port workers on the US West Coast has proven insufficient to affect cargo flows, and congestion in that area is easing.
- Shipping lines have been addressing overcapacity by blanking sailings and total vessel departures to the US West Coast dropped 16% from Week 22 to 276,265 TEUs.
- Preliminary data suggest utilization remains weak at 78-80%, with just weeks to go before the traditional peak season starts in July.
The Shanghai Containerised Freight Index (SCFI) slipped again on 9 June as weak utilisation on the Transpacific saw liner operators cutting rates on both the US West Coast and East Coast routes, erasing all of the gains made in the previous two weeks.
SCFI drops again
Shanghai-US West Coast freight rates fell 17% from 2 June to US$1,388/FEU, while Shanghai-US East Coast rates lost 8% to US$2,435/FEU.
Linerlytica’s latest report, issued on 12 June, said, “Capacity utilization remains too low to support rate increases, with the planned 15 June rate already withdrawn by most of the Trans Pacific carriers, with the next attempt to raise rates deferred to 1 July.”
Failure of demand on European routes
Linerlytica stated that real rate declines are more serious than what the SCFI suggests, with several carriers dropping rates to US$1,200/FEU for the US West Coast and US$2,000/FEU to the East Coast, which would portend further SCFI declines this week.
“Even the strong demand on European routes has failed to stop rates from dropping, although rates to the Mediterranean has proven to be the most resilient,” pointed out Linerlytica.
Labor disruptions
Labor disruption involving port workers on the US West Coast has proven insufficient to affect cargo flows, and congestion in that area is easing.
Hopes that the Panama Canal Authority’s imposition of loading limits could push up freight rates have been dashed, due to sufficient capacity.
Transpacific overcapacity
Shipping lines have been addressing overcapacity by blanking sailings and total vessel departures to the US West Coast dropped 16% from Week 22 to 276,265 TEUs.
Thirty of 43 US West Coast services departed last week, as the OCEAN and THE Alliances blanked one service each.
However, preliminary data suggest utilization remains weak at 78-80%, with just weeks to go before the traditional peak season starts in July.
Weekly capacity will stay largely unchanged this week before surging to 350,000 TEUs next week, the highest level since July 2022.
Not all lines have cut sailings, and ONE’s capacity has increased by 46% while Yang Ming’s has increased by 21%.
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Source: Container News
