Shippers To Go Bankrupt With Skyrocketing Container Rates

938

  • Container rates sees a gain for the transpacific and Asia-Europe tradelanes.
  • For example, Shanghai Containerized Freight Index (SCFI) recorded further gains for the transpacific and Asia-Europe tradelanes.
  • Its combined reading is up another 7% for the week, to 1,263.26, which is 54% higher than a year ago.
  • Container spot rates from Asia to the US east coast jumped $254 per 40ft, to take the rate to $4,207, jumped $254 per 40ft, to take the rate to $4,207.
  • Also, rates to the west coast jumped $198, to $3,639 per 40ft.

Shippers’ ocean freight budgets ‘about to explode’ as rates hit new highs, write Mike Wackett for the LoadStar.

Freight rates shoot up

  • Asia to the US and Europe route sees an extraordinary surge in the ocean freight budgets with carriers looking for another round of freight rates hike.
  • Container spot rates from Asia to the US east coast jumps well beyond 2018 trade war high of $4,000.
  • Rates to the west coast jumped, which is another record for the tradelane and a massive 125% higher than recorded for the same week of last year.

Is the demand the cause to push the rates up?

Obviously yes and that is what Freightos CMO Eytan Buchman recollects on the present situation.

“Demand was strong enough to push rates up, even with cancelled sailings restored and carriers adding temporary and even new permanent services on the lane,” said Freightos CMO Eytan Buchman.

How does the demand play its role?

There is an unprecedented rush in demand due to container paucity out of China.

“With reports of rolled shipments and container shortages out of China indicating the extent of the demand rush, carriers will likely introduce another China-US GRI for September, which would be the sixth in just three months,” said Mr Buchman.

Experiencing a major surge in online orders

Jon Monroe, president of Jon Monroe Consulting and a representative for Worldwide Logistics, presented a weekly report.  He said that the big US retailers were were converting many of their stores to fulfilment centres.

Substantial freight price hikes takes its toll

“Importers’ budgets are ballooning and, in some cases, about to explode from having to pay the extremely high cost of transport,” said Mr Monroe. “The record high rates will undoubtedly cause bankruptcies in the worst case, and major budget excesses in the best case, scenarios,” he warned.

Shippers unhappy

Elsewhere, on the Asia to Europe tradelane, shippers are also up against it with spot rates jumping.

Albeit not to the extent as on the transpacific – containers being rolled – even on premium rates – and equipment shortages reported at depots.

But increased FAK rates to be rolled out

Carriers on the route are preparing to roll out increased FAK rates on 15 September.

For example CMA CGM will add $200 to the price of taking a 40ft box from Asia to North Europe, to take the rate to $2,500.

Maersk’s spot rates

According to a Chinese NVOCC report this week to The Loadstar, Maersk’s spot rates to from Shanghai North Europe have hit $2,760 per 40ft.

Maersk Spot and premium products from other carriers are now being quoted significantly higher than the market spot rate.

10% increase this week

The North Europe component of the SCFI recorded a further 10% increase this week, to take the spot rate to $1,029 per teu, while rates to Mediterranean ports moved ahead another 6% to $1,060 per teu.

Did you subscribe to our daily newsletter?

It’s Free! Click here to Subscribe!

Source: LoadStar

LEAVE A REPLY

This site uses Akismet to reduce spam. Learn how your comment data is processed.