On the wires: Does bruised and battered Sinotrans deserve to be dirt cheap?
“Sinotrans has unlocked some value over the past few years, but significant assets are still ...
Efforts to push rates up on Asia-North Europe trades are still failing, and carriers are now also beginning to feel the pinch from the China-US trade wars.
The Shanghai Containerised Freight Index (SCFI) today recorded spot rates for North Europe virtually unchanged, up just 0.2% to $812 per teu.
While this modest increase will allay some of concerns, there have been significant efforts to push rates up, with carriers removing a reported 150,000 teu in capacity from the trade and facing accusations of “weaponising rollovers”.
The bigger story this week, though, is the stark declines reported across US east and west coast routes, with rates dropping 4.4% and 7.2%, respectively.
According to the SCFI, rates to west coast ports this week fell $106, to $1,368 per 40ft, and to the east coast by $117, to $2,543 per 40ft.
The weak performance comes within days of west coast ports putting the blame for plummeting volumes squarely at the feet of the US government’s trade stand-off with China.
The port of Long Beach experienced a 9.7% volume drop in July, handling 621,780 teu, with imports down 9.9%, to 313,350 teu, and exports down 6.8%, to 111,654 teu. And empties recorded a double-digit decline, down 11%, to 196,777 teu. The month’s poor performance exemplifies a difficult year for the US gateway.
Executive director Mario Cordero said: “The [US-China] trade war is hitting the west coast hard… for more than a year the supply chain has bent under the weight, and there’s very little give left.
“If tariffs continue, and escalate, American consumers could see higher prices during the holiday season as businesses pass on their costs.”
Seemingly responding to the troubled environment, the US has announced a delay to the imposition of further 10% tariffs on China goods. This was reportedly down to “health, safety, national security and other factors” that may impact US consumers, but US president Donald Trump also appeared to be expecting reciprocity from China, tweeting “maybe this time it will be different”.
Despite the difficulties on the major trades, it seems carriers are continuing to make ground in the Mediterranean, as the SCFI recorded yet another upturn (4.4%) in rates on that trade.