COUNCIL OF INTERMODAL SHIPPING CONSULTANTS
ANNO XXXVI - Numero 31 MAGGIO 2018
OCEAN FREIGHT RATES STABLE AHEAD OF SUMMER PEAK SEASON
Ocean freight rates are relatively stable and slot availability
seems ample on front haul container trades ahead of the summer peak
However, there are mixed expectations on whether spot rates
could soon rise on key trades, including China-Europe, and rising
fuel costs are also set to become a factor.
The World Container Index, assessed by Drewry, fell 1.1% this
week and languishes 6.6% lower than a year ago.
Rates from Shanghai to New York decreased by $10 to reach $2,462
per FEU, while rates from Shanghai to Los Angeles dropped to $1,358,
a change of $39 per TEU.
Digital container freight platform Freightos also said that
transpacific headhaul rates remained soft, with CEO and founder Zvi
Schreiber noting that "despite recent speculation, it's
premature to talk of ocean freights recovering".
He added: "Rates for China East Asia to North America West
Coast and also to the East Coast continue to lag year on year.
In fact, last week was the 37th straight week of year-on-year
lags for both lanes.
And while it's true that most lanes' rates are marginally up
when compared with 2016, that was the year when ocean freight rates
"Given current dynamics, I don't anticipate that there will
be any significant increases lasting more than one week until we get
to peak season."
Freightos said the Global Container Index shed one percentage
point this week to fall from $1,268/FEU to $1,261, driven by the
Transpacific where China/East Asia to North America West Coast rates
dropped 4%, and China/East Asia to East Coast rates declined 2%.
However, not all analysts view container shipping's main trades
through a bearish lens.
Freight forwarder Flexport reported yesterday that space was
"tight" and "steady" on Asia-US West Coast and
Asia-US East Coast services.
The planned 15 May General Rate Increases (GRIs) have now been
postponed on both transpacific headhaul trades, but new GRIs have
been announced by lines starting 31May.
Analysts also differed on their respective readings of freight
activity on Asia-Europe headhaul services.
Drewry said yesterday that Shanghai-Genoa and Shanghai-Rotterdam
rates had both dropped 1% week-on-week and were now 10% and 18%
lower, respectively, than a year ago.
But Flexport said it had seen signs that the Asia-Europe freight
market was tightening.
"Rates started to noticeably increase beginning on May 1
with the partial implementations of the GRI," it said in a
market update last night.
"Space is open, but there have been a number of disruptions
and omissions due to weather."
Elsewhere, Flexport said Europe-US West Coast and Europe-US East
Coast services were both seeing "steady" rates with the
potential to increase over the week ahead.
It told shippers to book around two weeks in advance for both
trades, adding that GRIs had been announced by lines for 1 July.
Flexport also said exports from the US west coast were surging
as shippers prepared for trade restrictions.
"California ports experienced a 13-month high for exports
Los Angeles and Long Beach, the biggest US West Coast ports,
reported that loaded container exports increased 12% year-over-year
in April from a year ago," said Flexport.
It cited an international trade economist based in California
who said anxiety was driving the export trade because of
uncertainties and concerns about possible new tariffs, adding:
"Shippers want to get their goods on the high seas and to their
final destinations before the gates close on US exports."
As reported in Lloyd's Loading List, rising fuel costs also set
to become a factor.
For example, Mediterranean Shipping Co (MSC) is imposing a
bunker surcharge due to a sharp jump in fuel prices, which are up
more than 30% this year, and almost 70% since last June.
With crude oil today hovering around $80 a barrel - the highest
since 2014 - it said the situation was "no longer sustainable
without emergency action".
MSC's worldwide emergency bunker surcharge applies to all ocean
and land-based cargo carriage with immediately but is only
And as reported today in Lloyd's Loading List, container
shipping executives have begun calling for the supply chain to share
the burden of rising fuel costs, which is otherwise set to deliver
the container shipping sector with an economic hit of the value of
Carriers say there is little scope for further deceleration of
vessel speeds - which are seen as the 'last resort' for lines.
(from: lloydsloadinglist.com, May 25th 2018)
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