Asia-Europe ocean freight rates continued to rise over the last week, with spot rates from Shanghai to Rotterdam soaring 11% to their highest level since mid-March, $1,738 per 40ft container, as lines continue to match lower demand with blanked sailings, data from Drewry indicates.
According to the World Container index, assessed by Drewry, freight rates from Shanghai to Genoa have also continued to follow an upward trajectory since the first week of May and rose 9% – an increase of $165 – to reach $1,910 per 40ft box. Meanwhile, in the opposite direction, rates from Rotterdam to Shanghai spiked 10% to touch $1,038 for a 40ft box.
In contrast, transpacific rates have been moving downwards. Shanghai to New York rates decreased 5% or $131 and stood at $2,569 per feu, while average Shanghai-Los Angeles spot prices fell 3% to $1,700 per FEU. Rates on Los Angeles-Shanghai remained steady at $479 for a 40ft container.
Shanghai-Los Angeles spot prices remain up 27%, year on year, although other transpacific rates are down slightly compared with last year.
The average composite index of the WCI, on eight major East-West trades combined, for year-to-date, is $1,600 per 40ft container, which is $218 higher than the five-year average of $1,382 per 40ft container.
Drewry said it “expects no upward turn in rates next week”.
Plateauing of blank sailings
The latest update from Sea-Intelligence highlighted “the plateauing of new blank sailings announcements” as well as “the strength of the freight rates”.
It noted: “While the total number of announced blank sailings have now crossed the 500-mark, there has only been an increase of seven over the past week. We have now reached a plateau where carriers are maintaining their existing blank sailings, without the need for a large-scale increase in new blank sailings announcements.”
Going into the third quarter (Q3), Sea-Intelligence said blanked capacity “seems to taper off, indicating a return to the ‘normal’ levels of blank sailings. That said, carriers normally only announce blank sailings 4-6 weeks prior to departure, and this could be just that.”
It continued: “We also find that carriers have been particularly good at maintaining freight rates, and net of fuel, spot rates are actually up 25-40% in some trades compared to 2019. Carriers achieved this through rapid and hard capacity cuts, as we have been covering in depth for the past several weeks.”
Earlier this month, UK freight forwarder Norman Global Logistics highlighted that the “vast numbers” of blanked sailings on the Asia to Europe trade lane “is three times greater than normal and means that calls to UK ports are down 30%”. It noted that in the first week of May, nine vessels had been withdrawn, “removing the equivalent of 147k TEUs, representing 49% of the total market capacity and unlike anything ever seen before”.
By the following week, and moving forward further into May, it said the level of volume reductions “are still challenging; 23% this week and similar levels over the next few weeks, but our team are coping”.