The Drewry Hong Kong-Los Angeles container rate benchmark, published in the latest Container Freight Rate Insight report, increased by just 3% to US$2,452 per 40ft container this week, showing that the carriers’ announced US$500 rate increases have had limited effect on rates, so far.
The Drewry Hong Kong-Los Angeles container rate benchmark, published in the latest Container Freight Rate Insight report, increased by just 3% to US$2,452 per 40ft container this week, showing that the carriers’ announced US$500 rate increases have had limited effect on rates, so far.
The general rate increase took effect today for some carriers and is reflected in the Drewry benchmark. The Drewry Hong Kong-Los Angeles rate was $2,380 last week and the increase this week was $71 per 40ft container.
The previous increase in the rate was in mid-June, when carriers pushed through a peak season surcharge of about $450, though most of this gain has since been lost.
“The apparent failure of this week’s GRI is down to two factors,” explained Martin Dixon, Drewry’s research manager for freight rate benchmarking. “Carriers are staggering the implementation of this month’s GRI so further rate recovery is to be expected over the next 10 days. “But it also reflects the weak state of the market as soft demand growth and insufficient capacity correction weighs on rates. We expect freight rate levels to drift back downwards through the latter part of August.”
However, freight rates remain high by historical standards. For instance, the current benchmark spot rate is now 44% above the 2011 full year average and 40% higher than the 2006-2011 historical average rate.
Dixon cautioned: “While we expect further reduction in eastbound transpacific spot rates through the remainder of the year, importers and exporters will have to consider the impact of any big increase in spot rates between late 2011 and late 2012 on contract rates for 2013 and adjust their negotiation strategy accordingly.” The Drewry Hong Kong-Los Angeles container rate benchmark, tracked by Drewry since 2005, is published in the Container Freight Rate Insight along with rates covering 600 trade routes around the world. According to the Federal Maritime Commission, it is the most frequently used benchmark resource in index-linked contracts. Source: Drewry Maritime Research
