SIGNS SHOW THAT CONTAINER FREIGHT RATES ARE SLOWING DOWN

Logistic News

SIGNS SHOW THAT CONTAINER FREIGHT RATES ARE SLOWING DOWN

21 June 2024

Container shipping consultancy Xeneta said that although global spot rates were rising further, the rate of increase had slowed compared to the increases seen in May and early June.

According to Xeneta, average spot container freight rates from Asia to the US West Coast increased 4.8% on June 15, standing at $6,178/feu, compared to June 1 when rates on this route increased to 20%.

While spot rates from Asia to the U.S. East Coast increased 3.9% on June 15, rising to $7,114/feu, “a far less dramatic jump than when rates increased by 15% on 1 June,” Xeneta said.

Peter Sand, Chief Analyst at Xeneta, said: “Any sign of a slowing in the growth of spot rates will be welcomed by shippers, but this remains an extremely challenging situation and it is likely to remain so.”

Rates on Asia to Europe routes followed a similar trend, increasing 10% on June 15 to $6,357/feu, lower than the 20% increase on June 1. Average spot rates to the Mediterranean increased 7.2% on June 1 to $7,048/feu, a significant decline on the 19% increase on June 1.

“The market is still rising and some shippers are still facing the prospect of not being able to ship containers on existing long term contracts and having their cargo rolled,” Sand said.

He added: “Compared to mid-December last year before the outbreak of conflict in the Red Sea, average spot rates from the Far East are up 276% into the US West Coast and 316% into North Europe – these are huge financial hits for shippers to absorb.”

Sharp increases in spot rates to major consumer markets are raising concerns about a return to rising inflation in the regions, although Sand says the likelihood is unlikely, “ although it is not impossible” that rates will reach pandemic-era highs.

He said that rates could fluctuate dramatically if there is a ceasefire between Israel and Hamas.

Source: Phaata.com (In accordance with SeatradeMaritime)