Spot Rate Surge to Continue Past Golden Week, With Surcharges Causing More Pain

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Since the 1 July implementation of a series of peak season surcharges (PSS) and new FAK (freight all kinds) levels, the largest east-west container trades have seen a week of double-digit spot freight rate increases, reports The Loadstar.

Spot rate surge

After several weeks in which most of the focus was on soaring spot rates on the Asia-Europe trades, this week it was the turn of the Asia-North America trades to post the largest increases.

Drewry’s World Container Index reading for its Shanghai-Los Angeles leg grew 12%, to finish at $7,472 per 40ft, while Xeneta’s XSI’s Asia-US west coast leg recorded a rate of $7,648 per 40ft.

Meanwhile, the WCI’s Shanghai-New York leg grew 17%, to end the week at $9,158 per 40ft, and the XSI tracked a similar trend to $1,146 per 40ft.

The WCI’s Shanghai-Rotterdam leg also saw double-digit growth, rising 10% to reach $8,056 per 40ft, with the XSI’s Far East-North Europe growing a similar amount, recording a rate of $7,897 per 40ft yesterday.

However, it is also clear that many forwarders and shippers are paying well above the quoted indexed rates to secure space in an increasingly strong demand environment, a situation that – on Asia-Europe trades at least – is now beginning to impact major box shippers with significant amounts of contracted volumes.

Freight forwarders in Europe this week told The Loadstar that major shippers were being forced to pay space guarantee surcharges on at least a part of their volumes.

Another said that spot rates on Asia-North Europe had already breached $10,000 for many customers, and claimed the elevated pricing would continue until China’s Golden Week holiday, which begins on 1 October – and could even persist until the second quarter of next year.

Another believed there could well be a further 50% increase between now and Golden Week.

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Source: The Loadstar