Spot rates ex-Asia still falling, despite USEC congestion, with more blanks

Container spot freight rates on the main trades out of Asia continued to fall this week, as the resumption of operations at US east and Gulf coast ports eased industry congestion fears.

Nonetheless, the three-day stoppage by ILA members ensnared up to 70 vessels in the region, leaving an inevitable backlog that will take time to clear – estimates vary from “a matter of days” to “two or three weeks”, although it seems pretty clear that it is unlikely to have an effect on rates.

“Ocean freight rates to both coasts had been easing in the lead up to the strike, continued to do so during the closures, with rates more than 30% below highs reached in July, and should continue to ease now that the strike is over,” said Freightos lead analyst Judah Levine

“Ocean carriers had announced surcharges ranging from $1,000 to $4,500 per 40ft in anticipation of disruptions due to the strike.

“But as most of these would only have gone into effect in mid-October or later, they hadn’t impacted spot rates yet, and carriers have now suspended these new charges.

“With the strike over and peak season demand largely behind us, container rates should continue to ease on the seasonal lull in volumes between peak season and lunar new year, though east coast congestion caused by the strike may slow the pace of the decline while operations recover,” he explained.

According to Drewry’s World Container Index (WCI), spot rates on the Shanghai-New York leg were down 3% week on week, to $5,761 per 40ft, while its Shanghai-Los Angeles was down 5% week on week, to $5,071 per 40ft.

The Xeneta XSI transpacific route similarly declined 2.5% to $5,489 per 40ft.

However, carriers have also begun to increase the number of blanked sailings on the main east-west trades as demand slackens and to avoid a further build-up of congestion on the US east coast.

Announcing four blank Asia-US east coast sailings on 2M services today, MSC told customers: “Due to ongoing congestion at ports across the US east coast, we are compelled to implement blank sailings on our Asia to US east and Gulf coast services.

“The situation is significantly impacting port operations, leading to delays in cargo handling times and a buildup of vessels waiting at the ports. This delay significantly impacts the ability of the vessels listed below to return to Asia in time to resume their rotation,” the carrier said.

Drewry’s weekly bank sailings tracker stated there were 69 sailings cancelled between 14 October and 17 November across the transpacific, transatlantic and Asia- Europe trades, “out of a total of 693 scheduled sailings, representing a 10% cancellation rate”.

It added: “During this period, 58% of the blank sailings will occur on the transpacific eastbound, 26% on Asia-Europe and 16% on the transatlantic westbound trade.”

Asia-Europe rates also witnessed another week of single digit falls, with the WCI’s Shanghai-Rotterdam leg falling 6%, to $3,591 per 40ft, while its Shanghai-Genoa leg was down 2%, to $3,784 per 40ft

The transatlantic trade remained relatively stable, with the WCI’s Rotterdam-New York leg up 1% on the previous week, at $2,083 per 40ft, while the XSI’s transatlantic route climbed 6%, to 3,018 per 40ft.