Spot container rates from Asia to the US drop as carriers boost capacity, reflecting a soft market and weakened pricing power.
Spot container rates from Asia to the United States have declined as carriers increased capacity in a soft market, according to LA's Global Trade magazine.
Rates to the US West Coast fell by two percent, or US$33 per FEU, bringing the total to $1,861 per FEU. Month-on-month, prices have dropped 22 percent, or $511 per FEU, indicating weaker pricing power among carriers.
On the Asia-US East Coast route, weekly rates decreased by 1.5 percent, or $41 per FEU, to $2,709 per FEU. Month-on-month, rates were down nine percent, or $257 per FEU, marking a clear correction despite limited weekly fluctuations.
Xeneta chief analyst Peter Sand noted that supply and demand fundamentals are misaligned, with carriers adding ships even as demand softens. He mentioned that attempts to raise rates in mid-December may not be sustainable due to the downward pressure from rising supply.
Capacity on Asia-US West Coast services rose by 1.7 percent, or 5,300 TEU, in the latest week, while East Coast capacity surged by 10 percent, or 17,400 TEU. Month-on-month, East Coast capacity grew by 16 percent to 26,300 TEU, further intensifying pressure on spot prices.
Analysts indicated that the gradual return of container ships to the Red Sea-Suez Canal route, including CMA CGM's Indamex service, could add as much as two million TEU annually, which may further weigh on rates for Asia-US and Asia-Europe trades.
In contrast, transatlantic rates have steadied, with North Europe to US East Coast averaging $1,571 per FEU, down just 0.1 percent week-on-week. Monthly rates gained 0.3 percent, or $5 per FEU, as carriers trimmed capacity, stabilizing the supply and demand balance.
