East-west freight rates continue rise; even transatlantic edges up
Container spot rates have continued their upward trajectory on the trunk east-west trades with double digit week-on-week gains on the Asia-Europe and Asia-North America routes.
Drewry’s World Container Index (WCI) recorded 12% week-on-week increases on Shanghai-Rotterdam, Shanghai-Los Angeles and Shanghai-New York legs, which respectively finished the week at $4,172, $4,476 and $5,717 per 40ft.
“Drewry expects ex-China freight rates to rise due to increased demand, tight capacity, and the need to reposition empty containers,” the analyst said.
The WCI recorded an 11% increase in Shanghai-Genoa, to $4,776 per 40ft. Freightos’ FBX Asia-Mediterranean leg recorded a 17% increase on the leg to $5,179 per 40ft.
“Ex-Asia ocean rates climbed sharply last week as early month GRIs took hold – with additional significant increases possible in the coming days from mid-month GRIs and surcharges – as unseasonal increases in demand combine with already-stretched capacity due to Red Sea diversions that require the use of more ships and are still causing congestion in places like the West Mediterranean and South Asia,” Freightos head analyst Judah Levine said.
“Recent increases in Asia-Europe volumes during what is normally a slow season for ocean freight, surprised many carriers and may point to the beginning of a restocking cycle for European importers.
“The demand increase is resulting in reports of rolled containers and full ships through the end of the month,” he added.
Last week, European forwarders privately told The Loadstar they expected rates to reach $5,000 and $5,400 per 40ft for North Europe and Mediterranean shipments respectively by the end of the month – if this week’s price hikes are anything to go by, it would only take two more weeks of successive 10%-plus rate increases or reach that point, or even beyond it.
Carriers are clearly hoping for more – last Friday CMA CGM announced an Asia-North Europe FAK rate of $6,000 per 40ft to be implemented from 1 June.
And with carriers still short of enough vessels to run a full complement of weekly services – hard though that may be to believe, given how many new ships have been delivered so far this year – there doesn’t appear to be any short term tonic to shippers and forwarders.
Even the previously moribund transatlantic showed improvement this week – the WCI’s Rotterdam-New York leg rose 2% week-on-week to $2,209 per 40ft, while Xeneta’s XSI’s transatlantic rate grew 1% to $1,946 per 40ft.
In Hapag-Lloyd’s first quarter earnings call earlier this week, chief executive Rolf Habben Jansen suggested that if the transatlantic trade was now seeing rates pick up, that would underline that the correction going on in the market may well last longer than just the short-term.
“I think the Atlantic is always late. Whenever we see adjustments in the market, then we typically see that whether that goes up or down, that the Atlantic always follows three or four months later.
“I would expect to see a bit of a recovery on the rates there also because capacity on the Atlantic at the moment is actually fairly tight and also we see reasonably strong demand,” he said.
