Shippers face rate hikes and 'a classic supply-demand mismatch' in Q4
With the last sailings before China's Golden Week begins on 1 October, container spot rates on the transpacific trades finally began to tail off.
Spot rates from Asia to the US west and east coasts have been consistently rising since the end of August in a late peak season pricing rally - last week they breached $10,000 per 40ft to the east coast on Drewry's World Container Index (WCI).
However, this week some welcome stability returned, with the WCI's Shanghai-New York rate of $10,373 per 40ft a very marginal decline on last week, while the Shanghai-Los Angeles route was up 2%, to $7,838 per 40ft, a slower increase than seen over the past month.
More concerning for shippers and their forwarders is declining schedule reliability of transpacific ocean services and the knock-on effect that port congestion has had on freight booking processes.
US west coast forwarder Freight Right noted that "carriers are increasingly rolling bookings or outright canceling confirmed slots, citing vessel space and weight limitations", and warned that "bunched" vessel arrivals were disrupting hinterland distribution out of ports.
"Vessel schedules have become highly volatile," it said.
"Ships are arriving unpredictably, sometimes three to four days early, and other times several days late, disrupting port operations and terminal reception windows," it added.
Although Drewry said it expected transpacific rates to decline next week, Freight Right warned that there may be another spot rate rise in the last few days before Golden Week
"Rates may increase further for urgently needed cargo as carriers prioritise higher-paying bookings - importers with Amazon, Walmart, or other holiday-season delivery deadlines should treat confirmed space and realistic sailing schedules as more important than finding the lowest possible rate.
"Cargo departing after the holiday may have difficulty meeting final holiday inventory cutoffs, particularly for east coast destinations," it added.
A further worry for shippers is that 1 October will see the next round of general rate increases - between $2,000 and $3,000 per 40ft, depending on carrier.
Meanwhile, the Asia-Europe trades continued the descent seen since early July, with the WCI's Shanghai-Rotterdam leg down 4% week on week, to end at $3,485 per 40ft.
The WCI's Shanghai-Genoa route was also down, by 5% on the previous week, to $3,835 per 40ft, and Drewry said it expected prices to continue in this direction with the increasing use of the Suez routing - despite seven blanked sailings scheduled for next week, compared with three this week, the canal use means "recovering effective capacity outweighs blank sailings".
It is a different picture on the transatlantic, where Europe shippers exporting to North America are continuing to face historically high spot rates, which have been over the $3,000 per 40ft mark for over a month, and show little sign of dropping. They currently stand at $3,121 on the WCI's Rotterdam-New York leg, some 72% up year on year.
Steffen Manz, founder and CEO of Canadian forwarder Speed Global Logistics, told The Loadstar: "We are staring down a classic supply-demand mismatch for Q4," he said.
"On one hand, you have rising demand as Canadian importers actively pivot volumes toward Europe. On the other, carriers are already pulling capacity out of the market through blank sailings to protect their rate structures as winter approaches.
"We expect transatlantic spot rates to drift upward through the winter. Our advice to shippers right now is simple: secure your carrier allocations early, don't rely strictly on the spot market, and factor an extra seven to 10 days of buffer time into your European supply chains to account for winter weather delays and blanked loops," he added.
