Ex-Asia spot rates rise with cargo rolled

By Paul Kelly in News Posted: 8th, May, 2024

As predicted in our last freight market report the container shipping lines believe that volumes are rebounding to Europe, with projections for US imports also increasing and with capacity squeezed spot rates are increasing and lower-yield cargo is being rolled.

Indexed spot rates for the Shanghai-Rotterdam leg increased 2% week-on-week, while the Shanghai-Genoa index climbed 3%, but some shippers playing the spot market will already be paying more to avoid rollovers.

Spot rates are expected to continue increasing and this could just be the beginning, as Q2 demand is stronger than expected, with peak season volumes likely too and capacity is absorbed by residual blanked sailings and Red Sea diversions.

There are suggestions that restocking has contributed to growth in volumes, with European imports from the Far East up 12% year on year and US imports up 24%, which means more container equipment is going to these regions than forecast, with some lines imposing priority surcharges and others restricting equipment for contracted clients.

China’s factory activity has been growing for six straight months, suggesting that the rebound in the world’s second-biggest economy can be sustained, with export orders surging and a significant Westbound and transPacific peak period looking certain.

In addition to blanked sailings, smaller capacity vessels are being deployed to fill schedule gaps and carriers restructuring their networks to support new sailing schedules creates more disruption.

With the current market uncertainty we recommend extending the booking window ahead of cargo ready date and communicating with us as soon as possible, if you have any urgent or high-priority orders.

Last week also saw the introduction of new FAK rates on the Asia-North Europe trades, with some lines increasing trade disruption surcharges, with one tripling its peak season surcharge (PSS).

The tighter space has been exacerbated by schedule sliding’s, when cargo is rolled from its intended vessel to the next, which often means that shippers booked on that ‘next vessel’ find that their cargo rolled to make space available.

The strengthening demand on the Asia-European trades also increases the chances of cargo moving under long-term contracts, that the carriers deem un-economic, being rolled or allocations restricted and the only way to get more space is to use the spot market or premium guaranteed, pricing options.

We leverage our $Billion buying-power to negotiate contracts with shipping lines across the alliances that protect space and rates, to deliver cost-effective, resilient and reliable trans-Pacific and trans-Atlantic ocean freight solutions.

EMAIL Andy Costara, Global Forwarding UK
EMAIL William Bashford, Global Forwarding EU
EMAIL Adam Davies, Global Forwarding USA

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