30 Sep Freight rates starting to trend down on particular trades
Recent data indicates a downward trend in freight rates around the globe, with prices taking a steady tumble ahead of what is traditionally the commencement of the peak trading period. Here we take a closer look at the various geographical regions:
Asia-Europe
An early peak season that commenced in April appears to be coming to a close as European import demand slows and spot rates fall sharply off the peak levels reached in July. Although the current rate is four times higher than this time last year, Asia to North Europe rates have lost $2,700 per FEU since early July, falling to $5,800 per FEU this week, and Asia-Mediterranean spot rates have followed a similar pattern, falling from $8,400 per FEU in June to $5,800 per FEU.
As extra loaders were deployed to manage high demand and port congestion at both ends, excess capacity has become apparent as demand has slowed. However, whilst there has been a 10% decline in bookings for September, it’s important to note that there are strong forecasts predicted for the final quarter of 2024.
Trans-Pacific
Shipping organisations are offering more competitive prices from Asia to the US than they were a mere few weeks ago, with indications that voyage-specific “bullet” rates and commodity-specific rates are becoming the effective rate.
The spot rate from North Asia to the West Coast is approximately $6,000 per FEU. By contrast, several carriers are offering prices closer to $5,000 per FEU in the form of one-time, or “bullet,” rates, as well as so-called blended rates or rates specific to commodity or trade lane.
This comes as capacity to the West Coast exceeds current demand due to the reinstatement or launch of 10 Asian services deployed on the Trans-Pacific over the recent months and what was a tight market has begun to loosen up, with operators competing to fill their slots.
However, rates could potentially increase over the coming months as operators intend to deploy less capacity in the trans-Pacific which would increase competition for space. For the West Coast specifically, operators have indicated an intention to offer expected capacity of 1.41 million TEUs throughout September, down from expected capacity of 1.51 million TEUs in August.
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