Ocean rates tested by capacity conundrum

With our strong presence in the global container shipping arena, the U-Freight Group notes that attempts by container shipping lines to try and protect rates via GRIs and blanked sailings don’t appear to be working.

This week, Drewry’s composite World Container Index decreased 5% to USD1,859 per 40ft container.

Spot rates on the Transpacific Headhaul saw a double-digit decrease this week, with rates from Shanghai to New York falling 15% to US3,254 per 40ft container and rates to Los Angeles dropping 12% to USD2,328.

Although carriers were able to briefly sustain rates using GRIs, that impact proved short-lived as rates softened this week due to waning demand, with retailers having already imported their holiday season merchandise. 

Hence, Drewry anticipates rates will either soften slightly or hold steady next week.

Spot rates from Shanghai to Genoa increased 4% to USD2,193 per 40ft container and from Shanghai to Rotterdam they rose 3% to USD2,028. 

Carriers on the Asia–Europe trade route are trying to push spot rates up by introducing higher FAK rates ranging from USD3,000 to USD3,650 per 40ft box, effective 15 November, in an attempt to elevate spot rates before the start of the new annual contract negotiation season.

Drewry’s Container Forecaster expects the supply-demand balance to weaken in the next few quarters, particularly if normal Suez Canal transits resume.

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