Transpacific Freight Rates Soar As Shippers Rush for China Goods

494

  • Freight rates on the headhaul leg from Asia to the west coast North America hit extraordinary highs.
  • As a result, transpacific container shippers pay more than three times as much as their Asia-North Europe counterparts.
  • For example, North European importers pay $0.19 per nautical mile for a shipment from Shanghai to Antwerp, while American shippers and forwarders pay  $0.64 per nautical mile.

Transpacific rates hit new heights – now three times higher than Asia-Europe, writes Gavin Van Marle for the Loadstar.

Transpacific freight rates at a new high

According to new analysis from Alphaliner, after the Shanghai-Los Angeles SCFI spot rate reached a record $3,758 per feu on Friday, North American shippers and forwarders are now paying carriers $0.64 per nautical mile.

Whereas, North European importers are paying $0.19 per nautical mile for a shipment from Shanghai to Antwerp.  It is the lowest of the nine routes covered by the Shanghai Containerised Freight Index.

Rates more than three times 

“The fact that earnings per nautical mile are more than three times as high on the Asia-USWC trade is remarkable, as carriers need fewer resources (ships and equipment) on a shorter trade,” wrote Alphaliner today.

“A typical Far East-North Europe service requires the deployment of some 12 ships, whereas six are sufficient for a transpacific south-west loop.”

Shippers rush for goods

All the nine SCFI routes rates rise last week as shippers rush to get shipments out of China before the Golden Week holiday begins early next month.

Shanghai-Lagos is the second-most expensive route, at $0.58 per nautical mile, and Shanghai-Melbourne third, at $0.48 per nautical mile.

Meanwhile, the second- and third-cheapest routes are Shanghai-Genoa and Shanghai-Dubai, at $0.25 and $0.32 per nautical mile, respectively.

Profitability depends on operational costs

Alphaliner notes a range of other factors that come into consideration with regard to profitabiity.

Spot freight rate per nautical mile does not directly translate into profitability.

Profitability also depends on the operational costs, whereby carriers will enjoy the lowest slot costs on the Asia-North Europe trade as the majority of the megamax ships of over 18,000 teu are deployed there.

Current high spot rates and strong cargo demand on the transpacific are results in extra good revenues for the carriers.

But carriers also prepare to withdraw sailings during the Golden Week holiday in anticipation of an expected slump in demand.

MSC today announced the 2M would blank the departure from Nansha of its transpacific Maple service in week 41 and the Sequoia service from Yantian in week 43.

Did you subscribe to our daily newsletter?

It’s Free! Click here to Subscribe!

Source: The Loadstar

LEAVE A REPLY

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