Container carrier is at sea

No one believed that container shipping rates of $ 20,000 per FEU would be sustainable in the fall of 2021. If tolls stay at these levels for long periods of time, transportation demand will be disrupted and competition authorities will be forced to intervene. “It’s good for everyone if we see more normalization,” Habben-Lloyd’s CEO Rolf Haven Janssen said in a conference call in November.

The best scenario for a shipping company is that the COVID rate soars, customers are emotionally and economically accustomed to higher freight rates, and prices are stable enough to generate strong and sustainable profits for the shipping company. However, there is no intervention by such high competition authorities. To shippers, this new regular price is much higher than it was before COVID, but it can look like a bargain when compared to record highs.

The Drewry Spot Rate Index

Drewry’s weekly assessment for Shanghai-to-Los Angeles spot rates came in at $7,480 per FEU on Thursday. That’s down 23% year on year and down 1% week on week. This assessment is now 40% below its peak of $12,424 per FEU in late November 2021, yet still 5.3 times higher than rates at this time of year in 2019. Drewry’s weekly spot rating from Shanghai to New York was $ 10,164 per FEU, flat weekly, down 14% year-on-year and 37% below its mid-September peak of $ 16,183 per FEU. rice field. That 2019 level.

On the one hand, the sharp drop in prices over the last nine months has reduced shipper costs (at least compared to last fall), indicating that the market is functioning. On the other hand, tariffs on shipping companies are still very profitable, and shipping costs for shippers are dramatically higher than before COVID.

Freightos Spot Index

Freightos Spot Index Different indexes have different numbers, but the trends are the same. The Freightos Baltic Daily Index (FBX) rating from China / East Asia to the West Coast of North America was $ 7,264 per FEU on Thursday, down 65% from September’s record high of $ 20,586 per FEU, but still five times the price. is. This time of year is 2019. FBX The East Coast rate from China / East Asia to North America was $ 10,020 on Thursday, less than half of September’s record high of $ 22,234 per FEU, but more than three times the pre-COVID level.

The decline from the peak is much steeper for the Freightos Trans-Pacific Index than for Drewry and other index providers, as Freightos began incorporating premium rates into its valuation method on July 28, 2021. Currently, the location is open and shippers usually do not pay insurance premiums. Dafna Farkas, Corporate Marketing Associate at Freightos, told American Shipper: We continue to confirm that the all-in rate is reflected in the index and have not changed the methodology in this regard. Premiums are largely phased out due to industry normalization and are not actually reflected in industry prices at price levels.

Market in “standby” mode.

S & P Global Platts (formerly Platts) rated all types (FAK) fares from North Asia to the West Coast of North America on Thursday at $ 7,100 per day. This is a 25% decrease from the peak, but still 4.3 times the 2019 level. S & P Global reduced its FAK rate from North Asia to the east coast of North America by 19% to $ 9,700 per day. S & P Global container shipping team expects demand from the end of the Lunar New Year in Asia-US February. S & P Global said this week that downward pressure on spot rates continues. Given the availability of ample space from China and the fact that small chartered carriers are below the fares of the larger major carriers (ie competitors). She reported that some spot offers from North Asia to the West Coast were less than $ 7,000 per FEU.

George Griffiths, Senior Editor of Global Containers Transportation at S & P Global Commodity Insights, told American Shippers: There are rumors that the blockade will increase in Shanghai, and there are concerns that delays on the east coast of the United States will spread to the west coast, but there is nothing concrete. “Of course, high inventories and rising living costs are currently curbing demand. Therefore, the atmosphere is quite bearish and the empty [cancelled] departures airlines are bringing in to protect their rates. Can only be helped by. “

Related Article: Is this the end of the container shipping industry bull run as demand drops?


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