Container spot rates ex-Asia to both North Europe and the Mediterranean have fallen sharply again this week, prompting carriers into last-minute cancelled sailings – over and above their already aggressive blanking programmes.
Moreover, there are reports of newbuild ultra-large 24,000 teu vessels going straight from shipyard to anchor, as European consumer demand dries up ahead of China’s Golden Week holiday, in the first week of October.
Drewry's WCI Asia-North Europe component fell 10% this week, to an average of $1,449 per 40ft, which is 81% lower than a year ago.
And while rates on the trade have returned to the levels prior to the pandemic, costs have not.
Indeed, during a Hapag-Lloyd press briefing this week, CEO Rolf Habben Jansen confirmed that “rates are down and revenues are under pressure”.
He said: “Many would say rates are at the same level as they were in 2019, but costs today are much higher, with factors such as inflation and the new IMO rules.”
Meanwhile, the hitherto more-robust Asia-Mediterranean trade is also now experiencing a short-term rates erosion; the WCI reading taking a 7% hit, down to $1,888 per 40ft, and 76% lower than it was 12 months ago.
It was, however, a better story for transpacific carriers this week, where their judicious capacity management seems to have succeeded in stabilising rates from Asia to North America.
Xeneta’s XSI Asia-US west coast reading edged up 2% on the week, for an average rate of $2,178 per 40ft, and is now up 77% since the end of June.
Xeneta’s chief analyst Peter Sand said it seemed that carriers were “succeeding in turning the tables” on shippers. And he noted that long-term contracts on the tradelane were also on the way up.
“This may come as a nasty surprise to some shippers who have become accustomed to falling rates and, in the face of uncertain consumer demand, have held back from signing new long-term contracts,” he said.
And on the Atlantic and Gulf Coast, there is no evidence as yet that the Panama Canal draught restrictions are having an impact on demand or spot rates for the all-water Asia-US east coast services going via the waterway. For example, this week’s WCI Shanghai to New York average rate ticked down just 1% on the week, to $3,398 per 40ft.
Notwithstanding the welcome good news for carriers on the transpacific, the transatlantic market, in contrast, is in danger of collapse, as spot rates sink to levels 50% lower than before the pandemic.
Indeed, the Freightos Baltic Exchange (FBX) North Europe to US east coast component carried on falling this week, down to an average of $1,094 per 40ft, which compares with an average of around $8,000 a year ago.
Commenting on the dire situation for transatlantic carriers in the Baltic Exchange monthly report, Vespucci Maritime’s Lars Jensen said the effect of carriers pumping more capacity into the tradelane to take advantage of lucrative rates was “completely predictable”, noting that, in August, carriers operated 19% more capacity than in the same month of 2019.
According to CTA data, demand on the route in the first half of this year was 13.6% down on the first half of 2022.