Port of Seattle becomes the latest casualty of container congestion
The 2M carriers, Maersk and MSC, with VSA partner Zim, will drop Seattle from the ...
A blanked sailing from the 2M+HMM grouping on the transpacific this week failed to halt the further erosion of freight rates to both the Asia-US west coast and Asia-US east coast destinations.
The departure of the 8,500 teu Hyundai Faith, scheduled for this week, was cancelled “to rationalise capacity supply from Asia to the US west coast”, according to vessel-sharing agreement partner MSC.
The blanking was on the MSC Yulan service connecting Shanghai, Gwangyang and Busan with Los Angeles.
However, the capacity cut failed to push up rates, which this week saw further declines on the transpacific, according to multiple indices.
The Shanghai Containerised Freight Index (SCFI) recorded a 3.4% on the Shanghai-US west coast leg to $1,294 per 40ft, while the Shanghai-US east coast leg saw rates drop 2.2% to $2,450 per 40ft.
The Freightos Baltic Index broadly concurred with the SCFI assessment. Yesterday, it put the China-US west coast rate at $1,315 per 40ft, and noted that rates had jumped 24% at the beginning of April following a general rate increase (GRI) to $1,555 per 40ft, but “they’ve been dropping ever since”, it reported.
“A 10% drop from last week has prices almost back to where they were before the April 1 GRI. They are currently only 7% higher than this time last year, down from being 50% higher in January.”
The index recorded the China-US east coast rate at $ 2,776 per 40ft, which is 16% higher than the beginning of April, which it said was “largely due to ongoing Panama Canal capacity reduction”.
Freightos chief marketing officer Eytan Buchman added: “While overall ocean prices are still some 5% stronger than this time last year, the gap is shrinking as ocean prices fell this week, led by a 7% drop on transpacific routes.
“President Trump’s warning earlier this month that untaxed products might shortly get a 25% trade tariff slapped on them may be sufficient to trigger importers to front-load shipments, especially those who were burnt on duties from May 10’s increase.”
George Griffiths, editor of Platts S&G Global Container Freight Market, agreed: “Rates have continued to come off on transpacific routes with the new tariffs looming large and an increasingly bearish sentiment gripping the market through the summer, when rates are typically much stronger and demand picks up.
“With no lead time ahead of these latest tariffs, the market didn’t see the same rush of imports as previously. This lack of front-loading has led some carriers to be cautiously optimistic going forward: if stocks are running low, tariffs or no tariffs people must import goods into the US to sell.
“This sentiment appears to be the silver lining in an otherwise cloudy sky,” he said.
Yesterday OOCL announced that the Ocean Alliance would blank two transpacific sailings in June, one each from the Pacific North West 1 and East Coast China 2 services, while THE Alliance is set to void next week’s sailing on its Pacific North Loop 1 service between Qingdao and Prince Rupert, Canada.
Meanwhile, on the Asia-Europe trades, carriers finally managed to reverse weeks of continual declines to post modest increases.
The Shanghai-North Europe leg of the SCFI increased 2.8% to end the week on $743 per teu, while the Shanghai-Mediterranean leg was up 2% to $710 per teu.
Yesterday, CMA CGM announced 1 June FAK price increases for its Asia-Mediterranean services to $1,000 per teu for west Mediterranean ports and $1,400 per teu for East Mediterranean and Black Sea routes.