Transpac fears as pressure on spot rates hardens, but Asia-Europe is calmer

© Richard Van Der Pluijm

Container spot rates on the transpacific tradelane softened again this week, carriers losing all the November GRI gains – and more.

According to today’s Shanghai Containerized Freight Index (SCFI), the rate for Asia to the US west coast plunged 12.2% to $1,097 per 40ft, after shedding 11.5% and 8.9% in the past two weeks.

And on routes to ports on the US east coast, the downward pressure continued, but was less intense: spot rates declined 6.7% to $1,681 per 40ft, after previous falls of 6.1% and 8.2%.

Drewry says spot rates for the US west coast are some 18% lower than at this time last year and, for east coast ports, the consultant says the difference is even higher at about 29% below 2016.

The recent spot rate erosion is a concern for transpacific carriers, not least as the slack season has barely begun, according to Alex Younevitch, of Container Freight Markets at Platts Global.

“There wasn’t one carrier we spoke to this week that expressed any optimism about increasing rates in December,” he told The Loadstar today.

Meanwhile, on the Asia to Europe tradelanes, there was a more optimistic view expressed by The Loadstar’s carrier sources: that, despite the absence of winter blanking programmes, spot rates have stabilised.

However, according to the SCFI, Asia-North Europe component fell 5.4% this week to $689 per teu, and spot rates for Mediterranean ports were down 3.9% to $595 per teu.

This followed little or no movement in the SCFI for these components the previous week. The ‘market’ is suggesting that carriers can now hold these rates until the year-end, when they will look for a demand boost ahead of the early Chinese new year festivities, which commence on 16 February.

Interestingly, the FAK rates from 1 December from Asia to North Europe, announced by CMA CGM this week, of $950 per 20ft and $1,800 per 40ft, are unchanged from the carrier’s mid-November prices.

And on the backhaul North Europe to Asia route, carriers appear to have succeeded in holding onto much of the rate gains of March and April, attributed to alliance network changes which resulted in skipped sailings and a capacity crunch.

According to Drewry’s World Container Index (WCI), spot rates from Rotterdam to Shanghai this week were $991 per 40ft – a 2% increase on the previous week and a massive 57% higher than a year ago.

MSC said this week “strong demand” on the backhaul would see it raise its FAK rates on the leg from North Europe from 4 December.

Looking ahead to next year, Patrik Berglund, CEO of freight rate bench marker Xeneta, told The Loadstar he did not agree with doomsayers predicting another damaging rate war for carriers.

“Shipping lines are still going into the year-end in a much healthier market than a year ago, despite the recent softening of rates,” he said.

“Our customers are already contracting 2018 rates and we are already seeing plenty of long-term contracts committed throughout the full year, at double the low point of 2016.”