Ocean freight rates flat as 1 January rises are sustained
Ocean freight spot rates on the main export trades out of China look set to be broadly flat this week following the partial success of New Year general rate increases (GRIs), according to shipping and freight forwarding sources.
The latest Shanghai Containerised Freight Index (SCFI) figures, from 5 January, indicate that average Shanghai-North Europe prices will rise this week by just under 3% to US$864 per teu, while Shanghai-Mediterranean average spot prices were set to be exactly the same as last week’s level of $738 per teu. Those follow rises the previous week of 8% on Asia-North Europe and a 23.8% jump in spot rates for Asia-Mediterranean services, according to the SCFI.
On the transpacific, following a 29% increase in spot rates the previous week on the Shanghai-US west coast (USWC) trade to $1,523 per loaded 40 ft unit (feu), average spot prices are estimated to fall this week by just under 4% to $1,465 per feu. Meanwhile, spot prices for Shanghai-US east coast (USEC) services are set to rise fractionally this week to $2,425 per feu following their 23% rise the previous week to $2,418 per feu.
The trade with the most significant shift this week is Asia-South America, with the SCFI forecasting a drop of $227 per teu on average spot prices from Shanghai to Santos to an average of $2,923 per teu.
In its latest ocean freight rates analysis on 3 January, US technology-driven freight forwarder Flexport reported that 1 January GRIs were implemented at around $300 per feu for the USWC, with rates rises of around $400 per feu for the USEC, and about $200 per feu for Asia-Europe.
It expected further rate increases as the month continues, with space remaining tight all the way through to Chinese New Year on 16 February. It expected further rises from 15 January GRIs on the transpacific trades, and average rate rises of around $200 per feu to be implemented on Asia-North Europe as a result of 8 January GRIs.
Noting that factories in China will be closed or operating at diminished capacity for at least four weeks around the time of Chinese New Year, Flexport added: “Because of increased demand, rates will stay up and space will be more difficult to secure − both trends that will continue through the start of Chinese New Year. End-of-year blank sailings have led to cargo overflows, further tightening space this week.”