Container spot freight rates saw another week of moderate decline on the main east-west routes amid subdued trading activity due to the Golden Week holiday, but workers were beginning to return to their jobs yesterday.
Nonetheless, pricing continued to fall, with the composite rate on Drewry’s World Container Index (WCI) down for the 17th consecutive week, plumbing a level not seen since January 2024.
At that point, facing a similar picture of uncertain demand and industry-wide overcapacity, carrier balance sheets were saved by the onset of the Red Sea crisis overnight soaking up some 14% of global capacity. The region made its first tentative steps towards peace, via the ceasefire deal, raising the prospect of a widespread resumption of Suez Canal transits. Maersk’s share price yesterday hit a three month low on the back of the news, financial analysts told Reuters.
The WCI’s Rotterdam-Shanghai leg slipped 2% on the previous week, to end on $1,577 per 40ft, a level now 56% down year on year; while the Shanghai-Genoa leg lost 1%, to $1,793 per 40ft, 53% down year on year.
This represents the ninth consecutive week of spot rates declines on Europe-Asia trades and has prompted a number of carriers to schedule new FAK rates to be implemented on 15 October.
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Today, CMA CGM joined MSC and Hapag-Lloyd in issuing new FAK levels on its Asia-Mediterranean services, also penned for 15 October, with Asia-West Med shipments at $2,300 per teu and $2,900 per 40ft; Adriatic ports at $2,500 per teu and $3,100 per 40ft; and east Med destinations at $1,900 per teu and $2,900 per 40ft.
A forwarder on the trade noted to The Loadstar that the price hikes were due to coincide with a series of blanked sailings designed to curtail capacity.
“Due to continuous blanked sailings, capacity is expected to be tight throughout October – rate increases are expected by mid-October, which is dependent on resumption of production post-holidays in China.”
On the transpacific trades, the WCI’s Shanghai-Los Angeles leg lost 1% on the previous week, to end at $2,176 per 40ft, some 57% below where it was at this point last year, while the Shanghai-New York leg was flat, at $3,189 per 40ft.
Despite a sense of rate declines levelling, Freightos head analyst Judah Levine suggested that spot rates on both transpacific and Asia-Europe would likely remain weak until the end of the year.
“With Golden Week behind us and peak season over for both the transpacific and Asia-Europe trades, a demand lull is likely to take hold on these lanes until the lead-up to Chinese New Year in January,” he said.
One possible silver lining for carriers – although certainly not for their customers – is the re-emergence of serious port congestion in Northern Europe’s largest ports, the catalyst being this week’s 48-hour strike by lashing operatives across Rotterdam’s container terminals, as well as action by pilots in Antwerp and Zeebrugge. This could all tie up significant amounts of capacity and create a short-term rate spike, if combined with the carriers’ new FAK price hikes.
