Container spot freight rates saw another week of gentle declines across all the major trades , as carriers failed to lift pricing in advance of a series of 1 December general rate increases (GRIs).
There was also no discernible effect from Donald Trump’s announcement that he will seek to impose 25% tariffs on imports from Canada and Mexico, and put a further 10% on Chinese imports.
This week’s World Container Index (WCI) from Drewry showed a 5% week-on-week decline on the Shanghai-Los Angeles leg, to $4,250 per 40ft, while the Shanghai-New York leg lost 1%, to $5,192 per 40ft.
Despite some expectations that the tariff announcement would lead to renewed bout of front-loading of US imports and a spike in spot rates, this doesn’t appear to have happened so far, and Xeneta chief analyst Peter Sand said it was not the first risk US shippers had had to face in recent months.
“Many US shippers have been front-loading the entire year, to handle the Red Sea and US east and Gulf coast disruptions, this is why we may not see a massive increase in demand from the tariffs, as some of it is already done and inventories may be brimming already.
“But anything you can move, you probably will move,” he added.
However, with the implementation date of the new tariffs still unknown, there is an outside possibility that Mr Trump will somehow force them into effect on his first day in office in January, which could leave some importers scrambling to bring in their goods in a very short space of time.
“If 20 January is the real cut-off date, every shipper will soon run out of time, and they will need to ship the goods within the next 30 days,” Mr Sand said.
He added that both spot and contract rates on the transpacific routes were trending downwards, while on Asia-Europe routes, both long-term and short-term rates were rising.
If Asia-Europe rates had turned the corner after nearly a month of declines, it had yet to feed into this week’s WCI, where the Shanghai-Rotterdam leg declined 2% week on week, to $3,997 per 40ft, while the Shanghai-Genoa leg was also down 1%, at $4,490 per 40ft.
Nonetheless, four weeks of flatlining rates on the transpacific and Asia-Europe trades could well be reversed by a series of higher rate levels due to be introduced on Sunday, 1 December.
On the transpacific eastbound, a number of carriers have announced GRIs: Cosco, HMM, Evergreen and Hapag-Lloyd a hike of $3,000 per 40ft; CMA CGM, Yang Ming and Zim of $2,000; and ONE opting for just $1,000 per 40ft.
On Asia-Europe, also effective on 1 December, MSC and CMA CGM separately announced new FAK rates of $6,500 per 40ft on Asia-West Mediterranean ports, while Hapag-Lloyd will implement a rate of $6,100 to North Europe and $6,400 to the West Mediterranean.
Hitherto, Asia-Europe forwarders have been sceptical that these new FAK rates will stick, given the general pricing weakness over the past month, although many also believe this could depend on how carriers manage capacity.
During this month, around 10% of all scheduled weekly sailings have been blanked, which failed to prevent rates dropping since a raft of GRIs were introduced at the beginning of November.
Drewry’s Cancelled Sailings Tracker currently shows around 10% of sailings globally – 72 out of 719 – will be blanked from the beginning of December through to the end of the first week of January.
“With uncertainty over sustaining GRIs next month, stricter cancellations may be needed to keep the rates elevated,” it noted.
