- shipping chaos gives top importers ‘massive competitive edge’
- unprecedented spread in spot prices in trans-Pacific trade
- the largest importers are paying far lower freight rates than smaller importers
- a price differential of $15,000 [per forty-foot equivalent unit or FEU] between the lowest short-term price in the [trans-Pacific] market and the top price
The Asia-U.S. container market is now in a class by itself, with the trans-Pacific eastbound trade pricing differently than any other route in the world says an article on Freight Waves.
Trans-Pacific spot pricing
Stimulus-driven demand is so high compared to capacity — not just capacity of ships and boxes but of ports, trucks, rail, and warehouses — the high-low spread of trans-Pacific spot pricing has ballooned.
The largest importers are paying far lower freight rates than smaller importers, the playing field is becoming increasingly uneven, and foreign ocean carriers are in a position to pick the American import sector’s winners and losers.
Analyzing price difference
“We’re seeing a price differential of $15,000 [per forty-foot equivalent unit or FEU] between the lowest short-term price in the [trans-Pacific] market and the top price,” said Erik Devetak, chief product, and data officer of Xeneta, a Norwegian company that analyzes freight rates, during a press conference on Thursday.
Massive competitive edge
“This implies a huge competitive advantage for established players, which has consequences across the economy and for everyday life, and also, from a point of view of lowering competition and increasing barriers to entry for future competitors.” Patrik Berglund, CEO of Xeneta, added, “Everybody’s seeing price increases but … being really big is really a massive competitive edge in this market.”
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Source: Freight Waves