Container rates soar even higher – and there’s no end in sight
Another week, another record for container shipping spot rates. And alarmingly for shippers, the momentum for rate hikes is accelerating.
Different indexes offer different numbers, and the additional charges on top of the spot rates are now so high that the index rates no longer reflect the true cost of shipping. However, when various indices all move in the same direction, it reflects changes in the supply-demand balance.
This balance tilts more and more to the detriment of freight shippers with each passing week.
“We haven’t seen the worst – $ 20,000 [per FEU] all-inclusive fares to the east coast are coming, ”predicted Steve Ferreira, CEO and founder of Ocean Audit.
Peak season is fast approaching and supply chain disruptions remain widespread. COVID-related disruptions at ports in China and Malaysia are the latest hot spots. “It is clear that the problems in the supply chain are getting worse and not improving,” warned Lars Jensen, CEO of Vespucci Maritime.
Asia-East Coast rates jump
The Freightos Baltic Daily index for East Coast Asia has jumped more than 20% in the past few days. On Thursday, the Freightos rate hit $ 9,317 per FEU, its highest level on record and up 224% year on year (y / y).
Drewry’s weekly estimate for the Shanghai-New York route was $ 8,251 per FIRE, up 9% per week (w / w) and 203% y / y.
S&P Global Platts provides daily assessments of Freight of All Kinds (FAK) rates. Its FAK Northeast Asia valuation on Thursday was $ 6,800 per FIRE, up 152% year-on-year.
Asia-West Coast rates also jump
There have been some big price increases recently to west coast ports as well.
Freightos valued Thursday’s Asian and West Coast spot rate at an all-time high of $ 6,341 per FEU, up 194% year-on-year. Drewry’s Shanghai-Los Angeles Weekly Index is $ 6,313 per FEU, up 6% w / w and 199% y / y.
S&P Global Platts’ FAK rate for North Asia and the West Coast of North America was $ 4,200 per FIRE on Thursday, almost triple the FAK rate a year ago.
Panama’s gap continues to widen
Asia-East Coast fares have increased faster than Asia-West Coast fares, according to Freightos data.
As a result, the gap between the east coast and the west coast of Freightos – premium importers pay to travel the long route through the Panama Canal – hit a record $ 2,976 per FIRE on Thursday. It has exploded in recent days.
Westbound transatlantic fares continue to increase
Initially, the transatlantic westbound route from Europe to the east coast avoided the massive price inflation seen on other routes. This reprieve ended in April.
Freightos’ Europe-East Coast valuation for Thursday was $ 5,193 per FIRE, a new record and up 164% year-on-year.
Emphasizing how different clues give different numbers, Drewry’s number is way lower than Freightos. Drewry valued Rotterdam-New York rates at $ 3,988 per FEU, up 66% year-on-year.
In an interview last month, Nerijus Poskus, vice president of the global ocean at Flexport, told American Shipper: “The most interesting for me is the transatlantic, where prices have gone over $ 5,000. [per FEU, westbound]. It is fairly balanced between imports and exports and although eastward pays less than westward, it still pays well. So, in my opinion, the transatlantic is the best source of money for shipping companies these days. “
Transpacific exports: full and empty
Rates of US West Coast exports to Asia also jumped, albeit on a much lower basis. Freightos valued fares on that route at $ 1,208 per FIRE on Thursday, up 154% year-over-year.
Drewry’s weekly rate is lower: $ 808 per FIRE, up 61% year-on-year.
The transpacific has always been much less balanced than the transatlantic, and is even more so today. There is a rush to get containers to west coast ports so they can be sent back to Asia and used for US imports. This leads to models never seen before in rail data.
FreightWaves SONAR has proprietary data on a portion of the movements of loaded and unloaded containers by rail, including 20, 40 and 45 foot units.
Usually, international containers loaded to Los Angeles / Long Beach carrying export cargo are about double the volume of empty containers arriving at ports.
The gap between the two narrowed at the start of the year and since April, international rail voids covered by the dataset arriving in Southern California have exceeded loaded incoming boxes. The gap is widening. As of Thursday, the volume of inbound voids arriving at Los Angeles / Long Beach was 46% greater than the volume of loaded rails.
Another very unusual pattern has emerged in Chicago, another indicator of the rush to return vacuums in Asia.
Last year, the number of loaded international containers included in the proprietary data set leaving Chicago by rail was about double the outgoing empty units. But this month, the outgoing voids overtook the outgoing loaded international cartons.
On a relative basis, the change is even sharper. The number of loaded full containers covered by the dataset leaving Chicago on Thursday fell 4% year-on-year, while empties rose 62% year-on-year.
According to FreightWaves’ marine expert, Henry Byers, “The international container situation in Chicago is another major indicator of the severity of the supply problems.”
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