Intra-Asia lanes gain capacity and rates soar as Middle East loses out
Intra-Asia rates are now more than 80% higher than before the US/Israel conflict against Iran, ...
By Alison Koo
The extension of the US-China tariff truce to 10 November is unlikely to improve transpacific ocean rates, despite a planned increase on 1 September, as front-loading is mostly complete and carriers refuse to enforce capacity discipline.
Last Friday, the Shanghai Containerised Freight Index showed Shanghai-US West Coast rates lost about 3.5% from the previous week, to $1,759 per 40ft, while the Shanghai-US East Coast dipped 2.6%, to $2,719 per 40ft.
The index registered a tenth straight week of declines, despite the tariff pause extension announcement on 11 August. For now, the US tariffs on Chinese imports will stay at 30%, while China will maintain its 10% tariff on US goods.
Chinese forwarder Richie Tian, GM of DerChang, told The Loadstar that after the tariffs were paused, he had seen some uptick in goods being exported to the US. But he added: “This hasn’t lifted freight rates, due to ample shipping capacity.”
Linerlytica noted in its latest report that liner operators had refused to manage capacity to address declining utilisation.
The consultancy observed: “Gemini Cooperation carriers in particular [Maersk and Hapag-Lloyd] have maintained a zero blanked sailing record on core services, largely ignoring the rate slide as they continue to prioritise volumes over freight rates.
“Despite Maersk’s insistence that the Gemini network is able to adjust capacity to match market conditions, they have maintained their zero blanked sailing policy on the USWC services, including on the newly launched WC6/TP9.”
A representative of another Chinese forwarder, Basenton Logistics, told The Loadstar exporters had fulfilled most of their shipping requirements during the initial three-month moratorium on the extension. He said: “We’re not seeing any bulk shipments now. Any cargo is mostly done on an ad hoc basis.”
Xeneta’s chief analyst Peter Sand said in a note: “The 90-day extension will not have a significant impact on shippers, and we should not expect another cargo rush, as we saw immediately following the initial lowering of tariffs mid-May.
“Shippers have already embraced the first 90-day window of opportunity to front-load goods – there is no longer a pent-up demand to get goods into the US, so spot rates are expected to decline further in the coming weeks as capacity increases.”
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