News / Carriers face chilly response to their new transpacific contract rates

Transpacific container spot rates remain high as the contracting season moves into gear – however new contract proposals from carriers may get the cold shoulder.

Xeneta’s XSI Asia-US west coast component ticked up 1% this week, to an average of $4,762 per 40ft, which compares with the reading for the same week of last year of just $1,329 per 40ft.

Meanwhile, reversing consecutive weeks of decline, the Freightos Baltic Index (FBX) Asia to US east coast average spot rate increased 3% in the past seven days, to an average of $6,764 per 40ft, more than double the spot rate a year ago.

With ocean carriers, BCOs, shippers and freight forwarders assembling in their hundreds for the JoC TPM conference in Long Beach in a week’s time – the traditional start of the transpacific contract season – the lines will believe they are in the perfect position to push for substantial contract rate hikes.

However, anecdotal reports to The Loadstar suggest carrier account negotiators at TPM24, endeavouring to persuade customers to sign up for long-term deals, will be in for a challenging few days across the meeting rooms and halls of the Long Beach convention centre.

Meanwhile, there is a steady trickle of relief for Asia-Europe shippers with a continued erosion of spot rates this week.

Drewry’s WCI Asia-North Europe spot reading was down another 2%, for an average of $4,221 per 40ft, while the WCI Asia-Mediterranean shed a further 3%, to $5,042 per 40ft.

Nevertheless, most of the Red Sea crisis surcharges and FAK (freight all kinds) increases are still built into rates, with spot rates still, respectively, 158% and 99% higher than 12 months ago for North Europe and the Mediterranean.

“Unfortunately the lines have succeeded in baking-in the Africa re-routing surcharges and rate hikes, which seem excessive, and they are mostly holding firm, despite the slack season now being in play,” a director of a UK-based NVOCC told The Loadstar.

However, another retailer contact told The Loadstar this morning his rates from China to the UK were “almost back to normal” And also, he is not seeing any problems getting his goods.

“The extra transit has now settled into our planned schedule, so it’s no longer interrupting our supply chain,” said the retailer.

On the transatlantic tradelane, carriers are not having it all their own way with their aspirations to push rates back up, despite taking out capacity on the route.

CMA CGM said it was postponing its 1 March $600 per 40ft “rate restoration initiative” for shipments between North Europe and the US west, east and Gulf coasts, as well as Canadian and Mexican ports, until 1 April.

Indeed, it appears the transatlantic rate recovery has run out of steam after consecutive weekly gains, with this week’s WCI North Europe to the US east coast component falling 3%, for an average of $2,204 per 40ft.

Nonetheless, carriers have succeeded in returning headhaul transatlantic rates to viable levels, following six months of sub-economic rates, thanks to effective capacity management.