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Transpacific the most profitable container trade by far, says Alphaliner

Carriers are earning up to $1.30 per nautical mile on spot shipments from China to the US west coast, making the transpacific by far the most lucrative major container trade. Alphaliner's latest analysis of spot freight revenue per nautical mile highlights the growing gap between the transpacific and other major trades - returns on China-Europe routes are significantly lower, for example. Spot rates on the Shanghai-USWC route have remained between 3,063 and 3,687 points on the Shanghai Containerized Freight Index (SCFI) since the beginning of July: at around $7,500 per 40ft, current rates translate into revenue of around $1.30 for each of the 5,775 nautical miles of a voyage to Los Angeles, noted Alphaliner. Although still below the Covid-era peak of 5,110 SCFI points, recorded in January 2022, rates are at their highest since July 2024, and comparable with those seen during the pandemic boom. The Shanghai-US East Coast trade is also generating substantial returns, added the analyst, with spot rates remaining above $10,000 per 40ft since late August. This equates to around $0.96 per nautical mile for shipments to New York, via the Panama Canal - comparable with the rates of $10,000-$12,000 recorded between August 2021 and June 2022. And the carriers have responded to the strength of the Pacific market by increasing capacity, said Alphaliner. In late August, MSC upgraded its Asia-USWC Sentosa service, replacing 15,000 teu vessels with those of around 23,600 teu. Zim, which already deploys 52% of its capacity on the trade, is preparing to launch another China-California service, the ZX3, next month. By comparison, Far East-Europe services are generating considerably lower returns. Even using the shorter Suez Canal route, revenue is currently at $0.34 per nautical mile to Rotterdam and $0.50 to Genoa. For carriers continuing to divert vessels around the Cape of Good Hope to North Europe, revenue per nautical mile falls to $0.26, around 24% less due to the additional 3,309 nautical miles sailed. Latin American trades offer better returns than Europe, although they remain below the most lucrative North American routes. Shanghai-Santos currently generates $0.42 per nautical mile, while Shanghai-Manzanillo in Mexico yields $0.91. However, rates on both routes have been volatile over the past six months. Spot rates to Santos have fallen to around half their late-August level, while returns on the Mexico trade have fluctuated between $0.70 and $1.10 per nautical mile. Alphaliner said strong spot rates reflected the continued absence of spare capacity among the major carriers, with port congestion and schedule disruption preventing fleets from operating efficiently. Although carriers have begun returning to Suez Canal routings on Asia-Europe services, the consultancy said it saw no immediate signs of overcapacity, and cautioned that revenue per nautical mile did not tell the whole story, as canal charges and insurance premiums also influenced the economics of individual trades.

Calmer waters for container spot rates, but 'fragile' Middle East a threat

There was a certain sense of calm about the container spot freight rate market this week, with slight declines on both the transpacific and Asia-Europe trades as capacity constraints eased and demand remained seasonally subdued. Drewry's World Container Index (WCI) recorded a 2% week-on-week drop on its Shanghai-Rotterdam leg, to end at $3,615 per 40ft, while the Shanghai-Genoa was flat at $4,166 per 40ft, which indicated that new FAK (freight all kinds) levels, introduced by carriers on 1 November, were unable to stick. The carriers had aimed to push the Asia-North Europe spot rate up to around $4,500 per 40ft and to around $5,000 on Mediterranean shipments. A further attempt at higher FAK levels, around the same as before, is scheduled for 15 November, but modest demand and ample capacity is likely to weigh against them, European forwarders told The Loadstar. "On Asia-Europe rates, we did have initial rates for the fist half of November extended from mid-October, but these are starting to drop a little - I suppose, with the early Chinese New Year, carriers are expecting a small peak, but bookings at this stage would suggest it will not be like previous years," one said. Analysts at Linerlytica reported this week that carriers had been offering discounted rates, "ranging from $2,700 to $3,400 per 40ft on Asia-North Europe shipments". The continuing return of services to transiting Suez is also affecting market sentiment, by the expectation it will release more supply and shorten transit times, and thus drive down rates. According to Xeneta: "The return of networks to the Suez Canal releases capacity absorbed by longer diversions around the Cape of Good Hope, with 600,000 teu already released. "In October, carriers committed 467,297 teu of weekly capacity to the Red Sea - while this is 50% of the pre-crisis level of August 2023, it is roughly double the offered capacity compared with the end of August 2026." The freight rate intelligence platform added that it expected spot rates to decline some 30% over the course of 2027. "The Red Sea is pivotal to ocean container shipping in 2027 because it offers both sides of the coin," Xeneta chief analyst Peter Sand said. "If there is a full return [to Suez], freight rates could plummet. "We could also be faced with the opposite extreme if a deterioration in the security situation in the Red Sea forces carriers to revert to Cape of Good Hope diversions. This would bring chaos to ocean networks and upward pressure on rates. "The significant ramping up of Red Sea services in recent months should not distract from the fragility of the geo-political situation in the wider Middle East - it will not take much to ignite the situation again, and then the house of cards comes falling down," he added. On the transpacific trade, the WCI's Shanghai-Los Angeles route was stable, at $7,539 per 40ft, while the Shanghai-New York leg was down 3%, to $9,303 per 40ft. Forwarders on the trade reported "minor pricing adjustments", as the market has cooled since approaching pandemic-era highs last month, and with three blanked sailings scheduled for next week, compared with five this week, Drewry projected a "decline in [transpacific] rates next week". US west coast forwarder Freight Right said there had been "no widespread difficulty securing sailing space on China export lanes", with the October holiday rush having subsided. "The earlier pressure on vessel space has eased, improving booking availability from China," it added. "Rate reductions remain selective - small decreases depend on the carrier and route, indicating gradual easing rather than a broad market correction."

Vote opens on controversial Port of LA workforce disclosure rules

Californians head for the polls today to decide on Charter Amendment PRT - a package of changes affecting Los Angeles's airports, harbour, and Department of Water and Power, including new workforce disclosure requirements for leases at the port. The measure would require applicants for certain new Harbor Department leases, extensions, and amendments, to provide information on their employment and economic impacts, to be assessed by the Board of Harbor Commissioners . The vote comes amid opposition from a coalition of more than 50 business and supply chain organisations, including the Pacific Maritime Association (PMA) and Pacific Merchant Shipping Association (PMSA), claiming the proposed changes could "introduce uncertainty into underwriting and leasing decisions", and risk "discouraging investment and diverting cargo to competing ports". In a letter to Los Angeles City Council, the coalition urged councillors to retain the existing charter provisions governing port operations, and that embedding operational requirements in the City Charter could weaken the Harbor Commission's authority, and its ability to respond to changing market conditions and technologies. Signatories also include the Harbor Trucking Association, Foreign Trade Association, LA Customs Brokers & Freight Forwarders Association, and LA Area Chamber of Commerce. While the letter does not specifically refer to terminal automation, its concerns over investment uncertainty and the port's ability to adapt to evolving technologies raise questions about the potential implications for future automation projects. The amendment does not explicitly prohibit automation, or give the International Longshore and Warehouse Union (ILWU) a veto on investment decisions. However, employers have previously raised concerns that workforce disclosure requirements could create another obstacle to automation proposals. Port of Los Angeles declined to comment, saying it had played no role in the amendment. Yusen Terminals also declined, and no response was received from APM Terminals, TraPac or the West Coast Marine Terminal Operators' Association. No formal ballot argument against PRT was submitted, although the Chamber of Commerce has publicly opposed the measure, citing concerns about additional requirements on businesses and the potential impact on port operations. The ballot measure also includes provisions on funding for waterfront public access projects, longer lease terms for certain city departments and changes to the composition of the Airport Commission.