Rates update, week 51: GRIs boost prices, with more to come in January
Container spot rates on the transpacific trades shot up this week, on the back of ...
The scale of the improvement in the liner industry’s fortunes was laid bare today when OOCL released its first-quarter operational update showing its average revenue per container, across all trades, had increased 58.3%, year on year.
This was accompanied by a 28.3% year-on-year increase in volumes, which led to OOCL posting provisional Q1 21 revenue of $3bn, some 96% higher than its pandemic-afflicted first quarter of 2020.
The Hong Kong-headquartered line had seen spectacular increases on its transpacific, Asia-Europe and intra-Asia trades.
Its largest, in terms of volumes, remained intra-Asia, including Asia-Oceania services, which saw liftings grow 28.4%, to 855,901 teu, and revenue grow 91.6%, to $968.7m – the first-quarter effects of the pandemic were most noticeable in Asia, due to widespread factory shutdowns in China as the country struggled to contain the rate of infections.
However, the transpacific remained its largest earner: revenues in the quarter rose 84.9%, to just over $1bn, while volumes increased 25.3%, to 563,71 teu.
And for most of the rest of 2021, the transpacific trade will continue to see high demand and freight rates, according to analysis today from Maritime Strategies International.
“We expect rates, especially on the transpacific, to remain robust in the coming months as consumer confidence remains buoyant amid optimism in the job market and strengthening of the economy,” says its monthly market analysis.
“Cargo demand will remain elevated as American consumers draw down on federal stimulus payment and retailers continue to replenish depleted inventories.
“And while there is little clarity on when the supply side tightness will unwind, our expectation remains that rate relief will not come any time before the third quarter,” it adds.
Meanwhile, OOCL saw its biggest price increases on its Asia-Europe trades, where it recorded an astonishing 162.6% year on year increase in revenues, to $860m, while volumes rose by a more modest 20.1%, to 398,345 teu.
Its smallest trade, the transatlantic, saw volumes grow 2.8%, to 130,593 teu, and revenues grow 5.6%, to $157.4m.
OOCL added that its fleet capacity now stood 15% higher than the first quarter of 2020.
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