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Carriers are hoping to implement trans-Pacific general rate increases or GRIs from December 15 after rates held steady in the week to December 10
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Rates remained steady on the Southeast Asia-North America route as port congestion and delays offset tepid demand
Shippers could be facing higher trans-Pacific rates to North America this week as container shipping lines plan to push for more increases as demand strengthens, according to S&P Global Platts.
Carriers are hoping to implement trans-Pacific general rate increases or GRIs from December 15 after rates held steady in the week to December 10. This comes as importers from the West are actively soliciting quotes for sailings from Asia in January 2022 ahead of China’s Lunar New Year break in February, said the commodities market price information and analytics provider.
But shippers are struggling with a shortage of empty containers in Asia as port congestion, and blank sailings impede the return of equipment from Europe and North America. Shipping lines that can offer sufficient equipment can also demand more in premium service fees, Platts said.
“More ships are leaving the West Coast of North America without waiting to load up on empty containers, such is the rush to get back to Asia after all the other delays,” a US freight forwarder told Platts. “That just leaves a bigger pile of equipment to slow everything else down.”
Worse, China has ramped up its quarantine requirements for returning crew to seven weeks, further delaying ships that have needed to add port calls elsewhere for a quicker crew change. The flow of cargoes to ports in South China by feeder vessels has been particularly hard hit by these escalated restrictions.
But some sources doubted such a sharp increase would be accepted.
“Demand may pick up due to increased sailings before Chinese New Year, but rates will increase only marginally, if at all,” a source based in Singapore said.
Meanwhile, rates remained steady on the Southeast Asia-North America route as port congestion and delays offset the bearish sentiment due to tepid demand.
Sources told Platts said there is no rush among shippers to make bookings as most of the Christmas demand has been met and it’s too late to place new bookings.
“There have been substantial drops in the rates since Golden Week,” a logistics provider based in India said. “Don’t know why indices aren’t highlighting it enough. Only the exporters with high value goods are booking shipments at a higher rate and most of the small- and medium-scale shippers are just waiting for prices to come down.”
Shippers have become familiar with cargo delays and equipment shortages and are better at planning their bookings to avoid a tight deadline, the logistics provider added. But congestion issues and blank sailings from US ports remain a concern with a backhaul cancellation rate of nearly 10%.
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