News / Carriers disappointed as contract talks loom and rate hikes fail to stick

Container spot freight rates this week were virtually unchanged from last week, as planned mid-November rate increases from carriers have, apparently, failed to stick.

There was a marginal 2% increase on the Drewry World Container Index (WCI) Shanghai-Rotterdam leg, which finished the week at $4,043 per 40ft, while Shanghai-Genoa was unchanged, at $4,400.

Asai-Europe carriers and shippers have now begun the annual negotiations on 2025 contracts, and carriers are keen to hike spot rates – which act as a guide for contract rate levels – as high as possible, and this week’s lack of movement will undoubtedly disappoint.

The current WCI Asai-North Europe rate is far below the levels targeted by some carriers for 15 November: MSC was aiming for a new FAK rate of 5,500 per 40ft for Asia-North Europe shipments, for example; while CMA CGM targeted $5,700 per 40ft on Asia-West Mediterranean shipments.

But carriers are likely to have another go at the end of the month. MSC and Hapag-Lloyd have announced new Asia-Europe FAK rates to be implemented on 1 December, with MSC asking for $6,300 per 40ft from the Far East to North Europe, while Hapag-Lloyd is aiming for $6,100 per 40ft to North Europe, and $6,400 for West Mediterranean ports.

During yesterday’s third-quarter earnings call with analysts, Hapag-Lloyd CEO Rolf Habben Jansen revealed that the few 2025 contracts already concluded were up on 2024 levels, with spot rates currently far above the corresponding level at this point last year, although he added that the contracting calendar had slipped somewhat on the trade.

“It is still very early for the Far East contracting season. Negotiations have started in many cases, but most of those contracts will only be closed in the first quarter [of next year].

“Of course, the early ones that have been closed, there we definitely see that rates are up. They don’t go to the level of spots, but they are definitely up compared with what we had before.

“Also, don’t forget that many of the contracts last year were closed before we had the Red Sea crisis, so our costs are up significantly,” he added.

On the transpacific, there was also very little spot rate movement: the WCI’s Shanghai-Los Angeles leg contracted 2% week on week, to end at $4,700 per 40ft, while Shanghai-New York was unchanged, at $5,222 per 40ft.

One bright spot for container shipping lines is the intra-Asia trade. Drewery recently launched a fortnightly intra-Asia spot rate index, a composite of 18 routes, comprising north and South-east Asia, and China-Middle East/India services, which today recorded a 45% rise in price over the past fortnight, to stand at an average rate of $829 per 40ft.

Drewry said the increase had been seen “amid the pre-Christmas cargo rush”, and expected this “to continue in the next fortnight of November, due to tight space, traditional shipping peak season, blank sailings and other factors”.