Trans-Pacific box rates climb in November but far short of 2018's peak rates
TRANS-PACIFIC container shipping rates on the China to US west coast trade lane stood at US$1,482 per FEU on November 7, representing a 16 per cent increase compared to the previous month
TRANS-PACIFIC container shipping rates on the China to US west coast trade lane stood at US$1,482 per FEU on November 7, representing a 16 per cent increase compared to the previous month. However, rates are down 43 per cent from the price of $2,588 per FEU on November 7 2018, the Freightos Baltic Daily Index shows.
In Drewry's latest report on its World Container Index, the London-based maritime research consultancy said that in the first week of November, 'freight rates from Shanghai to New York spiked $113 and reached $2,639 for a 40-foot box,' while rates on the Shanghai-Los Angeles route showed a 'marginal increase', reported FreightWaves, New York.
Drewry predicted that 'trans-Pacific eastbound rates are likely to go up in the coming weeks, with shippers bringing forward cargo movements to avoid tariffs scheduled to be imposed on December 15'.
This year's pricing curve in the trans-Pacific trade lane is relatively close to that seen in 2017, which would appear to confirm that 2018 was anomalously strong. Last year, US companies heavily pre-imported cargoes ahead of tariff deadlines, on the assumption that tariff savings would offset higher inventory and storage costs.
The fact that trans-Pacific pricing has remained muted in the second half of this year suggests that the container shipping industry continues to face an oversupply of capacity.
Lacklustre rates have occurred during a period when container lines have been voiding a significant number of sailings to lower capacity and boost rates, while a substantial number of large box ships have been taken out of service for scrubber retrofittings ahead of the new IMO 2020 low sulphur rule. Those retrofitted ships will be returned to service in 2020.