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International Cooperation Department
Tel.: (+86-21) 65853850-8034
Fax: (+86-21) 65373125
E-mail: ICDept@sisi-smu.org
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International Shipping |
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| Container freight rates plummet! Peak season ending early |
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Date:2024-09-18 Readers:
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Spot rates on the major container routes continued to fall over the past week as demand remained muted and the expected short-term surge in demand ahead of the Golden Week did not materialise as expected.
In the past, the first two weeks of China's Golden Week holiday have seen a surge in demand. This year, however, shippers appear to be facing more pressing issues, notably the possibility of strikes on the U.S. East Coast and Gulf Coast, which is why spot rates on the Asia-North America East Coast route tumbled this week as the window for shippers to get imports to the East Coast by 1 October closed.
The Duluth World Containerised Freight Index (WCI) composite slumped on 12 September, dropping 13% week-on-week to US$4,168 per 40-foot container. Among them, Asia to Northern Europe and Mediterranean route tariffs fell 14 per cent and 12 per cent, respectively, and trans-Pacific route tariffs fell 15 per cent, with Shanghai to New York route tariffs dropping 21 per cent to $6,661 per FEU.
Delluri said that shippers are moving cargo from the US East Coast to the West Coast due to concerns about the impact of a possible strike by the International Longshoremen's Association (ILA) in October, leading to a drop in demand from the US East. This led to a 21 per cent plunge in US East spot rates. The agency expects east-west freight rates to fall further in the coming weeks due to weak demand.
‘With the pre-strike shipping window from Asia to the East Coast now over, and now more and more reports that carriers are starting to offer discounts, East Coast freight rates are expected to see a significant drop soon,’ explained Judah Levine, chief analyst at Freightos.
'This shipping deadline will provide support for West Coast freight rates as more and more cargo shifts from the East Coast and Gulf Coast to the West Coast. The International Longshoremen's Union and port operators remain sharply divided over issues such as pay and port automation, with talks at an impasse and a strike increasingly likely. However, a strike may not have a widespread impact on the availability of holiday commodities, as most importers have long ago shipped peak season cargoes in advance of this potential strike.
Indeed, among the major East-West routes, spot rates from Shanghai to Los Angeles fell the least, by just 7% to $5,627/USD this week, while the Xeneta Trans-Pacific Freight Index was down 4% to $6,342/USD.
Meanwhile, freight rates on Asia-Europe and Asia-Mediterranean routes also saw double-digit declines this week, further evidence that the 2024 peak season has come to an early end. Compared to last week, the Shanghai-Rotterdam WCI rate fell 17 per cent to $5,152/FEU, while the Shanghai-Genoa WCI rate dropped 10 per cent to $5,256/FEU.
https://www.cnss.com.cn/html/figure/20240918/354607.html
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