CONTAINER freight rates on the main east-west trades remained at high levels last week, although some routes began to see pricing tail off.
Last Friday's reading of the Freightos Baltic Index (FBX) shows the spot rate between Asia and the US east coast slip to US$7,358 per FEU, down from $7,477 the previous week.
Transatlantic shippers saw spot rates on the North Europe-US east coast trade, which had doubled since beginning of April, decline to $4,076 per FEU, from $4,274 the previous week.
The transpacific trade from Asia to the US west coast saw the FBX spot rate effectively flat, at $5,379 per FEU.
However, for European shippers and forwarders on ex-Asia trades, it was another week of pain, reports London's Loadstar.
The FBX spot rate for Asia-North Europe climbed 9.1 per cent, to reach $9,871 per FEU, while Asia-Mediterranean climbed 6.1 per cent, to $10,214 per FEU.
Meanwhile, Drewry's World Container Index's (WCI) reading of the Shanghai-Rotterdam leg stood at $10,174 per FEU, a three per cent gain on the previous week.
The reality, of course, is that many customers are paying far more than these rates, as carriers are increasingly levying extra charges such as space guarantees, which can easily reach $1,000 per box.
"The actual price for a FEU high-cube ex-China to the UK is now $13,000-$14,000, and I think it is possible we will reach $15,000," said one British forwarder.
"The rates are too high," he said. "We are now seeing shippers cancel orders because the freight rates cancel out their margins, and the whole situation has become really worrying, because I think this will lead to business failures and a lot of pain for the general economy down the road."
And while the transpacific and transatlantic might have been relatively calm, in terms of price movements, next week is expected to see a new raft of general rate increases on those trades, and spot rates could soar once more.
Said Xeneta founder and chief executive Patrik Berglund: "After years of fluctuating fortunes, the carriers are determined to seize on current opportunity, maneuvering to exploit huge consumer demand and increased online retail with new strategic moves.
"For example, Hapag-Lloyd now plans a $3,000 per FEU GRI on Far East-US trades from mid-June, and with fundamentals so much in their favour, there's a good chance they'll achieve some level of implementation," said Mr Berglund.
Similarly, transatlantic shippers are preparing a new set of GRIs and/or peak season surcharges, ranging from $500-$2,500 per TEU.
The high spot rates also continue to have a material impact on shippers and forwarders looking for longer term contracts, Mr Berglund said.
"With carriers blanking sailings to manage capacity added to continuing high demand and reduced retail inventories, it's difficult to see the prospect of any immediate rate relief on the horizon," he said.
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