News / New Asia-Europe peak season underway as ocean spots stay strong

Photo: VesselFinder

Merry Christmas: the new peak season on the Asia-Europe trade gets underway as shippers and their freight service providers take their annual break.

When they return to work in early January, one of the first things in their in-trays will be advisories of new peak season surcharges on ex-Asia shipments, as the pre-Chinese New Year rush begins.

Meanwhile, freight forwarders operating the trade told The Loadstar that space was likely to be at a premium in the coming weeks.

“We are seeing an increase in bookings up to the end of December and going into January,” one ocean freight booker at a large European forwarder said.

“I think the first half of January we will see some space issues, but it may be more around carriers managing allocation agreements more closely – I’m not hearing of any roll pools yet,” they said, adding that poor Asia-Europe schedule reliability on some carriers and alliances may have prompted shippers into limited front-loading.

“With these delays, I’m guessing shippers are trying to ship earlier, expecting the traditional January mini-peak.”

Continuing strong demand levels has also allowed carriers to hike January prices via a series of peak season surcharges (PSS).

“Talking to the carriers, they are all pushing at how strong they believe December and January, and even February, will be, although it is negotiation time. We are seeing freight rates increase for the second half of December, but nothing excessive,” the forwarder said.

Chinese New Year officially begins on 17 February – however, the public holiday in China runs from 15 to 23 February.

Meanwhile, last week’s World Container Index (WCI), produced by Drewry, saw spot rates on its Shanghai–Genoa and Shanghai–Rotterdam climb 10% and 8%, respectively, the third successive week of price increases.

“This strength is driven by a shift in seasonal patterns. Over the past three years, Drewry has recorded a double-digit month-on-month demand growth in December, establishing strong year-end volumes as the ‘new normal’.

“As carriers are already recording early bookings ahead of the impending lunar new year in February, Drewry expects further slight rate increases next week,” the analyst said.

Maersk has advised a PSS of $1,500 per 40ft on all Asia-Mediterranean shipments from 5 January.

On the Asia-North Europe trade, CMA CGM has opted for a dual pricing approach, with a $250 per teu PSS from 29 December, while also advising it will apply a new freight all kinds (FAK) rate of $2,600 per 40ft from 1 January.

Also on 1 January, MSC’s new FAK rate to North Europe will be $3,700 per 40ft, and $5,500 per 40ft on Asia-Mediterranean bookings.

According to Container Trades Statistics data, total Asia-Europe volumes up to the end of October this year hit 21.95m teu, year-on-year growth of 8.6%.

However, in expectation of a slowdown following Chinese New Year, carriers have also begun to prepare the trade for a series of blanked sailings.

For example, the Gemini Cooperation notified customers today that two of its four weekly Asia-North Europe services – Loop 1 and Loop 3 – will be blanked in week nine (commencing 23 February); its Asia-Med Loops 1 and 2 will be blanked in week 8 (commencing 16 February); and the Asia-Med Loop 3 will also be blanked in week nine.