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Box shipping prices on the Asia-North Europe lane drop 80% y-o-y on continuing soft demand in the West for Asian exports
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Drewry tracks 56 cancelled sailings from March 13 to 19 and from April 10 to 15 as carriers react to price dip
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Ocean carriers that expanded to air cargo following records profits pulling back on air capacity, too, as demand as demand for air cargo weakens
Shipping prices continued to slide last week, with Asia-Europe box rates dipping 80% year on year under pressure from continuing soft demand in the West for Asian exports that has led ocean carriers to cancel more sailings.
Drewry’s Cancelled Sailings Tracker said as of March 10, there were 56 cancelled sailings for week 11 from March 1 to March 19 and week 15 from April 10 to April 15.
London-based Drewry’s composite World Container Index decreased 3% to US$1,806.43 per 40-foot equivalent unit (FEU) containers by March 9, down 80% from levels in the same week last year, the supply chain advisor said.
Another market watcher, Freightos, said on March 8 its average Asia-Europe box rates fell 17% from a week earlier, but that the latest daily rates indicate prices are now at about the $1,500/FEU level, a 40% drop since the end of February and about on par with March 2019 rates.
This significant come-down suggests Asia-Europe ocean trade has entered price war territory as demand continues to slide and carriers are keeping some excess capacity active, Freightos head of research Judah Levine said in his weekly update.
Drewry said its latest WCI composite index of $1,806/FEU container is now 83% below the peak of $10,377 reached in September 2021. It is 33% lower than the 10-year average of $2,691, indicating a return to more normal prices, but still 27% above the average 2019 (pre-pandemic) rate of $1,420.
The average composite index year-to-date is $1,994/FEU container, which is $697 lower than the 10-year average, Drewry said.
Rates on Shanghai-Genoa slid 8% or $190 to settle at $2,287/FEU box while rates on Rotterdam-New York fell 4% or $196 to $5,377.
Rates on Shanghai-Los Angeles and Shanghai-New York sank 2% each to $1,916 and $2,707/FEU container. Similarly, rates on Rotterdam-Shanghai and Shanghai-Rotterdam also contracted by 2% each, to $702 and $1,562.
However, those on Los Angeles-Shanghai and New York-Rotterdam gained 1% each to $1,083 and $1,165/FEU box.
Freightos said last week’s average Asia-Europe container rate fell 17% from the prior week, but the latest daily rates indicate prices are now at about the $1,500/FEU level, a 40% drop since the end of February and about on par with March 2019 rates.
Rates on the Freightos Baltic Index (FBX) headed downward with rates on the Asia-US West Coast prices (FBX01 Weekly) falling 8% to $1,071/FEU. This is 93% lower than the same time last year.
Asia-US East Coast prices (FBX03 Weekly) fell 10% to $2,344/FEU and are 87% lower than rates for this week last year, while Asia-N. Europe prices (FBX11 Weekly) dropped 17% to $2,179/FEU and are 84% lower than rates for this week last year.
Freightos said Asia-Mediterranean prices are about $2,755/FEU, a 30% drop since February, but still 30% higher than in 2019.
Levine said the February reading of the US Federal Reserve’s supply chain disruption index indicates that conditions have now returned to historically normal levels.
Asia-US West Coast prices are now just above the $1,000/FEU mark, 93% lower than a year ago, 30% lower than in March 2019, and lower than any point in 2019. Rates to the East Coast are 87% lower than last year and 15% lower than in March 2019, Freightos said.
Some ocean carriers that used record profits to expand to air cargo are now pulling back on air capacity, too, as demand for air cargo continues to fall.
Freightos.com air cargo data shows transpacific rates increased about 10% last week, though they are half their level a year ago. And Freightos Air Index rates from Asia to N. Europe were $4.62/kg last week, 30% lower than a year ago, but still about double 2019 levels.
Drewry said 56 sailings were cancelled across the major East-West Transpacific, Transatlantic and Asia-North Europe & Med headhaul trade, with 57% of the blank sailings occurring in the Transpacific Eastbound, 34% on Asia-North Europe and Med, and 9% on the Transatlantic Westbound trade.
Over the next five weeks, THE Alliance has announced 31 cancelations, followed by Ocean Alliance and 2M with 12 and 4 cancellations, respectively. During the same period 9 blank sailings have been implemented in non-Alliance services.
