containers © Travelling-light _25246129
© Travelling-light

Container spot rates from China fell slightly this week, as carriers decided it was futile to discount cargo that is currently unavailable.

Moreover, container lines are receiving numerous booking enquiries for the end of March onwards and are understood to be considering a peak season surcharge (PSS) from 1 April.

The North Europe component of the Shanghai Containerized Freight Index (SCFI) edged down by 1.8% this week to $834 per teu while spot rates for Mediterranean ports fell by 5.2% to $977 per teu.

It was a similar story on the transpacific, with the SCFI recording a 3.9% decline to $1,423 per 40 ft for US west coast ports and a 3.1% drop to $2,768 per 40 ft for US east coast ports.

Supporting the general stability of rates in the face of the coronavirus crisis the China Containerized Freight Index (CCFI), which covers contract rates of three months or over, inched down by only 1.8% this week at a composite level.

Martin Holst-Mikkelsen, head of ocean for Asia-Europe at Flexport commenting on the tradelane to The Loadstar said: “We are seeing bookings picking up well in the weeks to come and the outlook has improved considerably. We do anticipate a larger than normal amount of cargo shifting during these weeks, as production resumes gradually.”

Mr Holst-Mikkelsen noted however that while production was resuming gradually “trucking capacity remains very scarce in China, restricting the shippers’ ability to transport cargo to the ports”.

“We see demand recovering through March and we expect to see somewhat of a spike in cargo towards the end of March or early April,” he said.

With a record number of blank sailings along with potential equipment shortages Mr Holst – Mikkelsen said that he expects spot rates to jump during April as demand exceeds supply on the route.

Indeed, with the inventories of many European retailers and manufacturers getter closer to being exhausted, it will be transit time rather than price that dictates bookings when they are eventually able to replenish their stocks.

Commenting on the rate situation Freightos CMO Ethan Buchman agreed that a further discounting of rates was “unlikely” noting that some of the ships that have sailed this week were reported to have had up to 90% of unused capacity.

“The partial resumption of work and beginnings of production are generating some initial signs of hope,” said Mr Buchman.

Freightos has seen an uptick in searches on its platform for freight bookings from China this week which it said indicated that some shippers were anticipating orders that will be ready soon.

Meanwhile, exporters to Asia from Europe and the US have seen their shipments stranded on the quayside as the knock on effect of the headhaul blankings has dried up capacity.

A UK forwarder told The Loadstar this week that his carrier had told him that they had “no idea” when the next sailing would be.

“We have had boxes stuck in Rotterdam for two weeks now and we keep getting different stories on the vessels and ETDs,” he said.

“And no doubt they will be wanting to hike up the rates very soon as well,” he added.


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