Carrier capacity management success signals more rate hikes

   Release date: 17/04/2023     Hits: 7920    Comment: 0    
Note: Container spot rates from Asia to North Europe increased again this week, and some carriers are holding off quoting for

Container spot rates from Asia to North Europe increased again this week, and some carriers are holding off quoting for May shipments ahead of anticipated general rate increases (GRIs).

Drewry’s WCI North Europe component edged up 4% on the week, to $1,598 per 40ft, however forward quotes for late April sailings from China are coming in significantly higher than spot.

Indeed, a shipper contact of The Loadstar is being quoted $1,750 per 40ft from Dalian, China, to Felixstowe and $1,825 to Rotterdam for an end-of-April sailing.

However, carriers are not yet showing their hands for May shipments, as they gauge the market response to the current rate hikes.

The shipping lines serving the tradelane seem now to be managing their capacity more efficiently and, this week, the Ningbo Containerized Freight Index (NCFI) commentary reported “space on some voyages was tight”.

A carrier contact confirmed to The Loadstar that headhaul load factors had “improved considerably” in the past few weeks, adding: “Most of our sailings are fully utilised this week and we are having to roll some containers, particularly if they are heavy.”

Elsewhere, spot rates from Asia to Mediterranean ports, which held up better during the rate collapse, were flat, with the Freightos Baltic Index (FBX) reading at $2,241 per 40ft.

Meanwhile, on the transpacific, the FBX Asia-US west coast component remained at its low of just over $1,000 per 40ft, however a raft of carrier GRIs, timed from the middle of the month and ranging from $500 to $1,000 per 40ft, looks set to push spot rates back up on the route as volumes pick up and carrier supply management tightens.

Port of Los Angeles executive director Gene Seroka said this week April throughput at LA terminals was expected come in at around 700,000 teu, up from the 623,234 teu processed last month.

The port’s Signal data, gleamed from the manifests of arrived and expected ships, appears to support this positive outlook, showing container imports from the 23 vessel calls this week at 116,939 teu, up 37% on the same week of last year.

And spot rates to the Atlantic and Gulf coasts from Asia halted their decline this week, with the WCI reading actually rising 2%, to $2,552 per 40ft.

Away from the major routes, container spot rates on the transatlantic tradelane continue to decline from their historically elevated levels, but the pace of the erosion is perhaps not as fast as expected. Xeneta’s XSI North Europe to US east coast reading this week ticked down a modest 2%, to $3,326 per 40ft.

Ocean carriers have piled more tonnage onto the route to take advantage of the relatively robust demand and higher rates, which could, in due course, result in more downward pressure on freight rates.

For example, OOCL’s transatlantic carryings in the first quarter of the year were up 25% on the same period of 2022, at 128,233 teu, however its average rate on the route fell 16.5%, to $2,432 per teu.


 
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