Container spot freight rates on all three of the largest east-west trades – Asia-Europe, transpacific, and transatlantic – were on the rise this week.
After three months of post-peak season declines, the Asia-Europe trades experienced a second week of spot freight rate increases, according to Drewry’s World Container Index (WCI).
The WCI’s Shanghai-Rotterdam leg was up 3% week on week, to end at to $3,632 per 40ft, while its Shanghai-Genoa route saw pricing increase 5%, to $4,152 per 40ft.
As is often the case, this week’s WCI Asia-Europe spot rate levels were indicated by last week’s Shanghai Containerised Freight Index (SCFI) figures, which showed Shanghai-North Europe at $3,547 per 40ft, and Shanghai-Mediterranean at $4,097 per 40ft, while analysts at Linerlytica noted that “actual spot rates remain weak with current carrier rates at below the SCFI’s assessment”, which chimes with some of the unsolicited spot market offers The Loadstar received from Chinese forwarders this week.
In an effort to stave off a downturn in pricing as the market moves into November, carriers are increasing the number of blanked sailings – according to Drewry’s Container Capacity Insight, eight blank sailings have been announced for next week, up from two this week, “indicating tight capacity”, as well as introducing new freight all kinds (FAK) prices on Asia-Europe.
This week MSC announced it would apply an FAK of $4,500 per 40ft on Asia-North Europe, $5,000 on Asia-west Mediterranean, and $5,100 on Asia-east Mediterranean on 1 November, while CMA CGM is aiming for $4,900 on Asia-west Mediterranean and $5,200 on Asia-east Mediterranean ports for the same date.
However, Linerlytica predicts the new November pricing will likely fail, although it is worth noting that in MSC’s case, the FAK rate to North Europe is the same level as that introduced in mid-October and only $500 per 40ft up in terms of Mediterranean destinations.
European forwarders reported receiving discounted offers on FAK levels throughout the first half of this month and suggested this will be repeated in November.
Meanwhile, transpacific spot rates grew more modestly in a week which US west coast forwarder Freight Right described as “a market stabilising”.
The WCI’s Shanghai-Los Angeles leg rose 2% week on week, to finish at $8,007 per 40ft, while the Shanghai-New route was York up 1%, to $10,166 per 40ft, with Drewry recording two blank sailings scheduled for next week, “down from six this week, indicating more effective capacity”.
“Since strong US import demand continues to support freight rates, Drewry expects rates to remain stable next week,” the consultancy added.
However, North American demand levels remain open to question, with Freight Right reporting that a much-anticipated seasonal slowdown was beginning with the peak shipping season “officially wrapping up, and volume is beginning a natural seasonal decline”, combining with a modest injection of capacity and some carriers offering discounts to gain market share.
“While baseline market rates remain flat through month-end, additional capacity is opening up,” it said.
“Aggressive pricing anomalies exist among niche carriers, such as Ocean Network Express (ONE), offering rates significantly below general market averages, though space on these lower-cost options is fully booked through October,” it added.
It further added that a spot rate of around $8,000 per 40ft was now common on the Asia-US east coast trade.
“Space conditions have eased in tandem with the west coast, ending the extreme tightness observed earlier in the season,” it said.
Meanwhile, rates on the transatlantic westbound head-haul grew again this week, with the WCI’s Rotterdam-New York showing 3% week-on-week increases, to end at $3,181 per 40ft, maintaining a a months-long run that has seen the spot rate persistently above $3,000 – it is currently 85% up year on year.