Last week’s spot rate data saw trans-Pacific rates into the US West and East Coasts increase for the 3rd consecutive week, while rates from Asia into North Europe flatlined, Asia to the Med fell fell and the trans-Atlantic is in relative free-fall.
Spot rate data saw Pacific rates into the US West Coast increase for the 3rd consecutive week, increasing 24% over the three weeks and are now also 24% above the level in the same week in 2019.
Similarly rates to the US East Coast are also up for the 3rd consecutive week by a total of 16%, but despite this they are only a scant 3% above the pre-pandemic level.
There is no certainty that spot rates will continue to increase through the peak season, or whether the new capacity that will enter the trans-Pacific in the coming months will cause rates to soften again, but right now it does look like the carriers will do whatever is necessary to support rates, including blanking more sailings.
Carriers have blanked 15% of Asia to North America capacity for July so far, having blanked 10% in June, while cancellations in May exceeded 14% of total capacity, 21% in April and the same in March, according to Sea-Intelligence.
Although carriers blanked more capacity March through June last year, the aggregated impact of the blank sailings, draft restrictions at the Panama Canal and increasing import volumes have impacted the effective capacity available, putting upwards pressure on spot rates.
We have seen reports of containers being “rolled” to subsequent vessel departures from Asian ports, either because a particular weekly service was cancelled or because the container was bumped by higher-paying cargo.
Rates from Asia into Europe did not fare quite as well, as North Europe rates were essentially flatlined compared to the previous week and Mediterranean rates dropped an additional 2%.
It should be noted that the Med rates still carry a considerable premium compared to North Europe, which remains 8% below pre-pandemic levels whereas Med are still 39% higher than pre-pandemic.
The trans-Atlantic market continues it rapid transformation from high flyer to bottom scraper.
Just four weeks ago the Atlantic headhaul rate was 36% above pre-pandemic levels. Now it is -31% below pre-pandemic levels as rates have dropped -49% in four weeks.
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