A wave of container spot rate rises amid peak season and tight capacity
Peak season is now fully under way, after a week in which spot rates on ...
By Alison Koo
Yang Ming today announced that its recently blanked transpacific services were expected to remain suspended until next year.
The news was part of a downcast outlook for the final quarter by the Taiwan carrier’s management.
The usual third-quarter peak season started and ended prematurely, it said, while record newbuilding deliveries and US-China trade tensions had made shippers hesitant to book slots.
In the first half, Yang Ming’s net profit was down 37% compared with the first six months of 2024, to $300m, and carrier president Cliff Pai added that Q4 was “traditionally the off-season for major routes to Europe and the U”.
He said: “Due to the delay in resolving the US-China tariff tensions, the overall market sentiment isn’t strong. The Shanghai Containerized Freight Index fell to its lowest point this year on the 19th.
“The fourth quarter is under great pressure and [we are] pessimistic. Shipment momentum is expected to be weak,” he added.
The carrier’s management also alluded to reports, from the US National Retail Federation (NRF) and maritime trade consultant Hackett Associates, predicting lower seaborne imports into the US in Q4, due to the tariff-induced front-loading in the first half of the year.
The NRF is projecting full-year US imports this year to dip 3.4% year on year, to 24.7m teu.
However, despite its conservative outlook for the fourth quarter, Yang Ming’s management said the third round of tariff negotiations between China and the US could take place in November.
“If positive news comes out, US customers may have a better chance of restocking, which is expected to trigger a restocking trend before Chinese New Year,” said Mr Pai.
Given the persistent Houthi scourge and unresolved geopolitical issues in the Middle East, there was no prospect of resuming Red Sea sailings in the next three months, he said.
When asked if current low freight rates were below break-even levels, Mr Pai explained that the cost structure of each route varied, making it difficult to determine the cost base using rates, which he said required “continued observation”.
Mr Pai added that the Premier Alliance, of which Yang Ming is a member, had reacted to the market correction by withdrawing transpacific sailings this month.
These blanked sailings would be in place until March at least, he announced, amounting to a 20% reduction in transpacific capacity.
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