Container spot rates from Asia to North Europe remained under pressure this week, while transpacific rates have been boosted by potential supply chain issues linked to US west coast industrial action and Panama Canal draught restrictions.

As peak season orders continue to disappoint, the Freightos Baltic Exchange (FBX) Asia-North Europe component slumped 16% in the past seven days, to $1,195 per 40ft, which compares with $10,599 a year ago.

Stubbornly high inflation and expectation of further hikes in interest rates mean European retailers are taking a conservative line with their inventories.

Indeed, in the UK, CEO of the British Retail Consortium Helen Dickinson said the further tightening of household incomes meant substantial sales growth in the coming months was “unlikely”.

“Growth in discretionary spending  has continued to tumble as the high cost of living squeezed households,” said Ms Dickinson.

Mediterranean markets, meanwhile, are proving more resilient, boosted by what is expected to be a strong holiday season, with Drewry’s Asia to Mediterranean reading edging down just 2% this week, to $2,130 per 40ft.

Despite an injection of additional capacity by carriers between Asia and the Mediterranean, spot rates are so far showing no significant sign of weakness.

Meanwhile, on the transpacific, shippers from Asia to the US are facing more challenges from the uncertainty surrounding a worsening labour situation on the US west coast. Labour contract talks broke down last week, leading to stoppages and slow working of ships, although both sides are now said to be “back around the table” to hammer out a new deal.

Nevertheless, the dockers’ ILWU local union and the PMA employers trade association appear to be as far apart as ever on the two outstanding issues of wages and port automation.

However, shippers that decide to divert their Asian imports to ports on the US east and Gulf coasts could find obtaining space on carrier loops via the drought-impacted Panama Canal difficult, as a consequence of vessel draught restrictions in the waterway reportedly curtailing ship utilisation levels by as much as 40%.

Unsurprisingly, spot rates from Asia to the US east coast have jumped this week, with, for example, the FBX average rate spiking by 11.5%, to $2,619 per 40ft.

And rates for the US west coast have also leaped, as shippers bring cargo forward to try to get ahead of any more serious labour disruptions, the XSI Asia to US west coast reading recording a 16.3% increase, for an average of $1,501 per 40ft.

Elsewhere, on the transatlantic, the erosion of spot rates continued this week as the market returns to pre-pandemic normalisation. Xeneta’s XSI reading for North Europe to the US east coast lost another 8% this week, for an average spot rate of $2,073 per 40ft, which compares with a market rate of around $8,500 12 months ago.

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