-
Ocean liners are reported to be cancelling sailings, with about 1.5 million TEU capacity blanked on the Asia-US West Coast lane in the past 12 weeks to boost falling spot rates
-
Spot rates for Asia to the US West Coast fell further this past week to between US$2,978 and $4,014/FEU, according to the Freightos and Drewry indices
-
Xeneta says aggressive blanking by carriers in the last four weeks saw an equivalent of 21 8,000-TEU ships being pulled from the FE-US West Coast lane
Carriers blanked some 1.5 million TEU (20-ft equivalent units) of capacity over the last 12 weeks on the Asia-US West Coast lane alone as they cancelled a significant number of sailings to the US and Europe amid falling demand that hammered spot prices, reports said.
Ocean spot rates out of Asia fell further this past week to below US$3,000 per 40-foot equivalent units (FEU), according to Freightos, a freight shipping marketplace and platform.
Reports earlier in the week said carriers were fighting to shore up falling spot rates on the Far East-US West Coast, blanking some 1.5 million 20-foot equivalent units (TEU) of capacity over the last 12 weeks.
Xeneta chief analyst Peter Sand said it was the highest number of blanked sailings on the key trade since January and February, when the industry would normally have expected very strong demand.
“It’s an aggressive strategic play by carriers, but it’s clearly not paying dividends,” he said.
“The last four weeks has seen capacity falling to its lowest levels since February, with an average of 275,000 TEU leaving the Far East for the US West Coast, about 50,000 TEU less than the peak in early August,” Sand said.
“Compared with the same period in 2021, capacity is down by some 13%. That’s the equivalent of removing 21 ships of 8,000 TEU, which is the average vessel size on this trade.”
The Freightos Baltic Index showed Asia-US West Coast (FBX01 Daily) rate fell 8% to $2,978/FEU this week, a 45% drop since the start of the month and the lane’s lowest level since August 2020. However, prices remain 128% higher than in September 2019.
Asia-US East Coast prices fell 5% to $6,952/FEU and are 63% lower than rates for the same week last year.
Drewry’s composite World Container Index fell 10% this week, the 31st consecutive weekly drop. The index has fallen 61% from levels a year ago.
The latest WCI rate of $4,014/FEU is now 61% below the peak of $10,377 reached in September 2021, but it remains 8% above the 5-year average of $3,714. A week ago when the WCI fell below $5,000 for the first time since April 2021, Drewry hailed it as sign that sanity was returning to shipping freight prices.
Drewry’s average composite index year to date is $7,597/FEU, still $3,884 higher than the five-year average.
Spot rates on Shanghai-Genoa dropped 19% to $5,216/FEU. Shanghai-Los Angeles fell 13% to $3,283/FEU. Shanghai-Rotterdam and Shanghai-New York dipped 10% and 5%, respectively, to $ 5,441 and $7,278/FEU respectively.
Freightos said on Wednesday prices from Asia-US East Coast and to North Europe have each shed about 25% this month but remain over 150% and 400% above 2019 levels, respectively.
The slower rate slides relative to Asia-US West Coast price slides are likely due to still-severe port congestion on these lanes, said Freightos.
“Though European ports like Hamburg and Rotterdam continue to suffer delays despite decreasing volumes, the spike in US East Coast port congestion over the last few months is driven by a significant shift of volumes from the West Coast which handled only 45% of US import containers in August,” Freightos said.
“Importers shifted away from LA/Long Beach not only to avoid the congestion and delays they experienced during last year’s peak season, but also to stay clear of possible labor disruptions since July when the ILWU’s contract with West Coast ports expired.”
Freightos said the first industrial actions of this dispute took place this week as ILWU members at the ports of Seattle-Tacoma and Oakland temporarily slowed operations.
