Soft demand and falling rates push 2M to blank another Asia-USEC sailing
2M partners Maersk Line and MSC have announced plans to blank sailings between Asia and ...
After eight consecutive weeks of declining spot freight rates on the headhaul legs between China and the US, the remainder of this year’s peak season is set to be worse for carriers than the corresponding period in 2016.
According to the Freightos International Freight Index, last year’s peak season was in three phases, beginning with a four-week rate rebound from the Hanjin bankruptcy.
Rates subsequently dropped during the Chinese Golden Week holiday, when cargo volumes effectively disappear, then began to rise from mid-October.
This year is beginning to look very different. Online pricing platform Freightos said in a commentary: “After an initial August spurt, China-US rates have steadily declined.
“If this peak season follows last year’s trend, prices would jump up next week. But two ominous signs indicate that this may not happen: ocean carriers aren’t optimistic – it’s been over a month since the last peak season GRI, with October rates staying flat; and capacity remains available on core lanes.”
According to Freightos, rates between China and the US east coast have declined for eight weeks on a roll, falling 20% over the period. The index’s current spot rate of $1,969 per 40ft is 17% below last year’s rate of $2,491.
A similar pattern is taking place on the transpacific route to the US west coast, where over the past two months rates have declined 9% and now sit at $1,415 per ft, which is 15% lower than the $1,712 this week last year.
However, Freightos said market weakness was “nowhere near” as pronounced on the Asia-Europe trade, where in contrast with the most recent Shanghai Containerised Freight Index, it recorded a slight rebound of 1% this week, to $1,400 per 40ft, with rates at the same level that they were at this time last year.
And on the transatlantic, carriers last week enjoyed a 10% increase in westbound spot rates to $1,250 per 40ft, although they are still 19% down year-on-year.