Trans-Pac spot rates to US east/west coast fall despite rise in Asian imports
TRANS-PACIFIC spot rates declined seven per cent last week to the US east and west coasts in spite of an increase in imports from Asia and tightening capacity.
The spot rate for shipping a FEU from Shanghai to the US east coast fell seven per cent from last week to US$2,419, while the west coast rate also decreased by seven per cent to $1,541 per FEU, according to the Shanghai Containerised Freight Index (SCFI) published under the Market Data Hub on IHS Media.
Spot rates to the US east coast have dipped for four straight weeks, and three of the past four weeks to the US west coast.
The sluggish movement of freight rates during the early weeks of the peak-shipping season continues on the Asia-Europe trade lanes as well. The spot rate to North Europe rose just $5, and the spot rate on the Asia-Mediterranean route fell by $9, according to the SCFI.
Industry analysts anticipate that expanding peak-season volumes will catch up with capacity in the short-term, which will result in spot rate increases.
"We believe that the short-term future is that there will be some issues on space, maybe for the next two and one-half months," president of 10X Ocean Solutions, Chas Deller, said. He added that importers will have to pay higher rates or their shipments could be bumped to future voyages.
Containerised imports at US gateways in August are forecast to reach a record 1.74 million TEU, according to the Global Port Tracker published monthly by the National Retail Federation and Hackett Associates. That would mark the highest monthly import total ever recorded by Global Port Tracker since it started reporting import volumes in 2000.
IHS Markit senior economist Mario Moreno forecasts a 6.6 per cent increase in containerised imports in 2017. Most US ports this summer have been reporting import increases of a similar amount. Nevertheless, the growth in vessel capacity on top of a rather large overhang in capacity as the trade entered 2017 are preventing carriers from being able to increase their rates dramatically this summer.