Seatrade-Maritime: Typhoons and AI boost transpacific container rates

Published by Seatrade-Maritime

As consumer demand falls AI shipments have filled some of the gap, though the major driver for Pacific rates is port congestion in China and parts of Asia.

Ted Chen, director of Ocean Freight at forwarder Dimerco Express Group, told Seatrade Maritime News that while the digital expansion in the US has raised demand it is not enough to compensate for the decline in consumer freight.

“The frontloading wave has passed its peak – transpacific rates are coming off their highs and Europe looks set to follow. But the cost floor isn’t moving, fuel and canal surcharges won’t fall with demand, so expect cheaper space, not cheaper shipping,” said Chen in the latest Dimerco market report.

Chen agreed his comments in the report were already out of date as the Pacific trade is dynamic and has already shifted. In particular blanked sailings and backlogs of cargo caused by typhoons in Asia has caused tight offered capacity.

Although the Asia to Europe trades have seen a decline in demand and spot rates, with the Middle East conflict still impacting freight movement regionally and bunker costs globally.

Peter Sand, senior analyst at Xeneta, said US importers were not so lucky in terms of the rate levels.

“American shippers bringing goods in via US West Coast and US East Coast were not so ‘fortunate’ – on the contrary they are faced with even higher freight cost in the early days of August,” said Sand, “Spot rates went up by 14% and 13% respectively. For importers via the US East Coast, the $10,000/feu mark is all but there.”

Chen confirmed the cause of some of the blanked sailings has been the poor weather conditions in Asia which can see ships delayed by up to five to seven days as they cannot berth in heavy winds.

“There’s active port congestion going on,” commented Chen, who added that further loading restrictions in the Panama Canal, which could get worse due to El Niño, is also impacting East Coast spot rates and surcharges.

According to Chen “There’s actually a queue out there [at the entrances to the Panama Canal] as we speak.”

Sand offered an alternative view of blanked sailings which he said has “spooked” importers: “Carriers keep trying to strike the right balance between the soft patch of demand and their eagerness to deploy capacity. This is done by blanking sailing on services where weekly departures were scheduled only to be cancelled at the last minute.”

Xeneta data show that the average spot rates from the Far East to US West Coast $6,824 per feu and $9,988 per feu to the US East Coast.

North Europe freight from Asia has declined by nearly 5% to $4,965 per feu and by a similar percentage to the Mediterranean which is down to $6,079 per feu.

On the Atlantic rates averaged $2,703 per feu, an increase of 6.8% from North Europe to the US East Coast.