 Carriers Control the Market as Rates Rise and Capacity Tightens |
Source |
American Shipper |
Post Date |
05/13/2024 |
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?ou take away all sense and rationale. And whatever is left, is the container shipping market,?said Peter Sand, Xeneta? chief analyst, today.
?t has certainly been a mad week,?added a European freight forwarder.
The continuing Red Sea crisis in combination with higher-than-expected demand caught many Asia-Europe forwarders on the back foot over the past fortnight, and this week the freight rate indices began to match anecdotal trade reports.
Drewry? World Container Index (WCI) this week saw its Shanghai-Rotterdam leg rise 20% week on week.
Meanwhile, the WCI? Shanghai-Genoa leg was up 16%.
While rates continue to soar, capacity out of Asia continues to tighten, which has allowed carriers to higher-paying FAK shipments over contract cargo, according to shippers and forwarders on the trade.
Last week, The Loadstar reported that Maersk was to implement a $1,500 per 40ft peak season surge (PSS) from Asia to North Europe from tomorrow, but sources suggest that new PPS pricing has already begun to be applied.
?ur carriers are not pulling rates yet, but they have halved our allocation and added a $1,400 per 40ft PSS from Dalian,?one shipper source told The Loadstar.
Speaking on this week? Loadstar Pod, Mr Sand explained that many shippers under contract could expect new surges to be levied by carriers.
?t this point in time ?early May ?should it be the peak season in container shipping??he asked.
?n the contrary. But we just saw Maersk upping its peak season surges for implementation in May, so that? the name of the game: find the right surge, the one that matches your legal contract with shippers, and then just push hard,?he explained.
However, it is far from a uniform picture. One forwarder said that, while they hadn? yet been notified of actual allocation cuts to NAC contracts and the agreed rates continued to be valid, ?t? a challenge getting these bookings confirmed?
Another forwarder suggested it was genuine demand that was pushing up volumes, allied with carriers?careful manipulation of capacity.
?etting containers booked into Europe currently is definitely a challenge, whether on contract, spot or FAK markets. Currently, it? a carrier-controlled market and the traders and importers need to keep up,?he noted.
However, sources indicated that the trade was likely to see ?ignificant rate increases for the second half of May?
That sort of market movement will leave many customers hoping the peak season has arrived early, Mr Sand suggested.
?t does seem as if some are preparing for a very tricky third quarter, because if you get rates like this and a squeeze on capacity during what is traditionally a very low quarter, what happens if demand were really to stack up in Q3?
?ates would really go up again, maybe even above where they were when they peaked in mid-January.
Rate rises were equally as strong on the Asia-North America trades, with the XSI transpacific trade rising 145%. while the WCI Shanghai-New York leg showed 116% jump.
In April 2024, U.S. container import volumes rose by 3.0% from March and 9.3% year-on-year, indicating a strong economy despite global instability, according to Descartes Systems Group? May Global Shipping...
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