News / Peak season 'already come and gone' for liners, but spot rate decline slows

There may be no sign of a peak season for liner shipping, but with the worst of the tariff news done and dusted, indices seem convinced that the volatility that marked the second quarter may have ebbed – at least for the next week or so.

Rates declined 3% week on week for the period ending 7 August, according to Drewry’s World Container Index (WCI), but it noted the heavy fall that began in mid-July appeared to have “lost momentum, and the rate of decrease slowed considerably”.

That will offer some encouragement for carriers, but where they will not find any, however, is the absence of a peak; one forwarder telling The Loadstar that “so far” there was nothing to suggest it may happen.

Another shipping source took it further: “I think the peak season has come and gone, and carriers now face a challenge to hold rates stable for as long as possible. Q3 is already sorted, but Maersk said today Q4 was an ‘unknown element’, but hoped it would still be ‘decent’.”

The forwarder agreed on the peak season: “We’ve had few moments of high movement from Brazil to North America because of US tariffs, but for the other lanes, the space is fine and freight volumes and rates are dropping.”

Looking at the granularity on WCI’s transpacific leg, spot rates fell for the seven days to 7 August, with Shanghai-Los Angeles having dipped 4%, week on week, to $2,534 per 40ft, with the Shanghai-New York leg down 7% to $3,826 per 40ft.

Xeneta XSI’s Far East-US West Coast trade was down more precipitously, 7.28% against the preceding week, to $2,012 per 40ft, while the Freightos Baltic Index (FBX) showed rates flat, compared with the previous week, at $2,342 per 40ft.

Xeneta’s chief analyst, Peter Sand, said carriers had acted to arrest “plummeting average spot rates” on the US west coast through a mix of blanked sailings – which are now almost double the number seen in mid-June – and strong capacity management.

“The dramatic spot rate decline has slowed in August, so stronger capacity management is having some success for carriers, but this is limited and not enough to stop a downward trajectory in coming months,” added Mr Sand.

And, while in line with the WCI rate, at $3,950 per 40ft, the drop FBX recorded on Asia-US East Coast was just 4% week on week, although this left it down more than $3,000 on the $7,182 per 40ft it recorded on the final day of June.

Drewry explained: “Since the big rush to ship cargo before the tariff increase is now over, Drewry expects spot rates to remain less volatile in the coming week. We expect the supply-demand balance to weaken again in H2, which will cause spot rates to contract.

“The volatility and timing of rate changes will depend on Trump’s future tariffs, and on capacity changes related to the introduction of US penalties on Chinese ships, which are uncertain.”

Shanghai-Genoa may also have dipped 4% week on week, to $3,227 per 40ft, but certain trades saw some stability, with rates on the WCI’s Shanghai-Rotterdam flat against a week earlier, at $3,276 per 40ft.

Indicating a slowing in the rate of decline, XSI’s Far East-North Europe benchmark recorded a 2.53% drop week on week, to $3,313 per 40ft, and, while still well up on the June nadir of rates in the $1,800 range, this time last year the trade was pulling in excess of $8,300.

Are there expectations this will linger into next year? That seemingly depends on whether you see the glass half-full or half-empty; but the optimists say that with Christmas volumes already being carried, they see signs that this blip would prove short-lived.