News / Ocean spot rates feel the pressure as CNY blankings are unveiled

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Container spot freight rates on the Asia-North America and Asia-Europe trades all declined this week, following gains made the week before on the transpacific, while Asia-Europe pricing appeared to stabilise in the pre-Chinese New Year mini-peak.

The largest loss recorded on this week’s Drewry’s World Container Index (WCI) was on its Shanghai-New York leg, which dropped 10% week on week, losing around $400 to end at $3,568 per 40ft.

Rates on the WCI’s Shanghai-Los Angeles route also dropped, by 7% week on week, to $2,909 per 40ft, with 15 January GRIs (general rate increases) to both the US east and west coasts failing to have any impact.

“Carriers were unable to sustain rates because of weak demand, despite upwards pressure on spot rates due to the expected Chinese New Year factory shutdowns in mid-February,” Drewry noted.

However, The Loadstar understands that many freight buyers on the trades are paying well below WCI levels – US-based freight forwarder Freight Right said rates this week from China to the US west coast were actually in the $1,850 to $1,950 per 40ft bracket.

“While most carriers are signalling another aggressive GRI attempt for the second half of January, targeting rates north of $3,000 per 40ft, early market behaviour suggests limited staying power at those levels,” it noted, adding that carrier attempts to push Asia-USEC rates above $4,000 marked that “competitive pressure and weak fundamentals are already undermining these efforts. As with the west coast, any mid-month increases are expected to face rapid erosion”.

Expectation across the board is that transpacific demand will continue to weaken. According to a survey of US SME importers by freight rate platform Freightos late last year, 62% of them “continued to find tariff changes significantly disruptive into early Q4, despite import taxes being reduced from a high of 145% to some 47.5% for Chinese imports to the US”.

It also found that 43% were reducing import volumes as a direct result of tariffs, with more than half “more concerned about negative impacts from tariffs than they were earlier in the year”.

In response, carriers have begun to put together their Chinese New Year blanked sailings programmes.

With China’s annual holiday starting on 17 February, at the beginning of week eight, MSC notified customer this week it would blank two transpacific sailings in week seven, three in week eight, and two in week nine.

Source: Drewry

On the Asia-Europe trades, six successive weeks of rising rates has come to an end, this week’s WCI’s Shanghai-Rotterdam leg dropping 3% to finish at $2,763 per 40ft. And the Shanghai-Genoa WCI spot rate declined 1%, to $3,839 per 40ft.

However, as with the transpacific trade, actual rates appeared markedly lower; The Loadstar has received unsolicited China-Mediterranean offers from Chinese freight forwarders of $2,800 per 40ft from China to Barcelona and Valencia, valid until the end of January.

And, despite yesterday’s announcement from Maersk that it would resume Suez Canal transits on its MECL India/Middle East-North America service, Drewry advised that the majority of carriers had been alarmed by the recent flare-up of tensions in the Middle East, amid President Trump’s threats to attack Iran.

“Ocean carriers have put on hold their plans to resume transits via the Red Sea amid escalating protests in Iran and the risk of direct US military intervention, which continues to drive volatility in the region,” it said.