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Home | Internacional | US WC rates to top US$4,000 in September
Postado em 20 de agosto de 2020 | 14:43

US WC rates to top US$4,000 in September

China to US freight rates continue their dizzying bull run with some commentators predicting that the China to US West Coast prices will surpass the US$4,000-mark next month.

Container spot rates between the world’s two largest economies continue to soar with the Freightos FBX01 Daily index posting a third consecutive historic record and positioning the FBX03 Daily US east coast index to follow it into uncharted territory next week.

China-US West Coast prices for a 40ft box were up 7% since last week to US$3,281/FEU, which is 148% higher than the same time last year. The same box moving to the US East Coast was also up 7% last week to US$3,703/FEU taking it to within 2% of the highest rate posted since the index was launched three years ago.

Strong demand rather than supply-side restraints imposed by the carriers were responsible for the runaway rates, according to Freightos chief marketing officer, Eytan Buchman.

Jon Monroe, president of Jon Monroe Consulting and a representative of NVOCC Worldwide Logistics said the latest news was just the tip of the iceberg. “Carriers started this year with three GRI’s and a PSS within 30 days of signing the contracts,” said Monroe. “What seemed to be unexpected was that they could maintain the rates and in fact increase them.”

Talk of a further general rate increase in September, Monroe said, could push “WC rates to US$4,000/FEU and EC rates to approximately US$4,600. The third quarter should explode. Vessels are back and extra loaders have been introduced. August and September will be huge months for carriers. Still a strong flow of containers. So much so that there is now an imbalance of 40ft high cube equipment in the Transpacific.”

Freight forwarders were bracing themselves for more increases into September.

“Chinese and US authorities are making inquiries into the role of cancelled sailings and capacity restrictions in the June and July rate spikes. But with Asia to US capacity nearly completely restored, this month’s hikes are definitively demand-driven,” says Buchman. “Even with the increases, space is tight, with delays, rolled shipments and premiums for guaranteed spots.”

The bull run has been a welcome boost for shipping lines that have been bringing tonnage back on stream to cater for the recovery in demand whilst avoiding the usual fight for market share. At the same time the lines have found a new place to compete by opening their tonnage up to play the spot market and grab last-minute shippers.

Maersk underlined the point when delivering USD$1.7 billion EBITDA for the second quarter, a 25% increase year-on-year. Not bad considering the world economy is on the brink of a recession as a consequence of the fallout of the Covid-19 pandemic.

“While a lot of focus was devoted to the day-to-day running of the business in Q2 due to the pandemic, we also continued to transform our business for the future, investing in digital solutions and broaden our presence in land-side logistics,” Søren Skou, CEO of A.P. Moller – Maersk told investors when the company released its interim results on Tuesday.

“In Ocean, the digital product Maersk SPOT continues to gain traction and now moves 41% of our short-term business,” He said.

The rapid shift towards the digitalisation and the impact this has had on the lines’ ability to tap into the significant gains on offer in the fast-moving spot market, was according to Lars Jensen, CEO of Sea-Intelligence Consulting, one of the most impressive aspects of Maersk’s healthy second-quarter results.

“Seen from a longer-term strategic perspective for the entire industry, this level of uptake cannot be underestimated,” he said. “The digital change in the industry has been massively accelerated and anyone not ‘on the train’ at this point needs to play catch-up real quick.”

 

 

Source: Container News


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