GreeceThere is an old shipping proverb: 98 tankers and 101 cargoes, boom! 98 cargoes and 101 tankers, bankrupt!
But this sentence does not translate well in container shipping. When supply exceeds demand, tanker spot freight rates will plummet. But container shipping is different. After demand falls, spot freight rates tend to gradually decline.
So far, the drop in freight rates appears to be gradual. Transpacific freight rates have stabilized in July and early August. And indeed, some indexes point to spot freight rates heading higher again.
Spot prices are stabilizing at least temporarily as U.S. import demand remains higher than pre-pandemic levels, some U.S. ports remain very congested, and shipping lines are canceling sailings both because their ships are stuck in port queues and Relevant to adjustments in vessel supply to match cargo demand.
S&P Global Commodities George Griffiths, managing editor of Global Container Freight at S&P Global, said: "At this point, blank sailings remain the preferred option for carriers trying to stem falling rates. Congestion remains the hot word at East Coast ports, Savan The Port of Namibia is currently feeling full loads of import cargo and delays. ”
FBX transpacific rates are up 3% from recent lows.
Different spot indexes give different freight price assessment results, but show the same trend.
Last Friday, the Freightos Baltic Daily Index (FBX) Asia-West Coast freight rate was US$6,692/FEU.
The good news for shippers booking spot cargo is: this rate level is only one-third of the historical peak reached in September last year. The bad news is that the freight rate result evaluated last Friday is up 2.7% from the low of $6,519/FEU on August 2, and is still 4.5 times higher than the freight rate at this time in 2019.
Image source: Xinde Maritime
Blue line: 2021, Orange line: 2019 (before the epidemic)
On Friday, FBX Asia- East Coast spot freight rate was assessed at US$9,978/FEU, the highest freight rate in less than September Half the record. However, this is up 3.5% from the recent low of $9,640 on August 2 and is still 3.6 times higher than 2019 levels.
Image Source: Sindh Maritime
Drewry Index Shows Gradual Decline
Drewry’s weekly index shows a milder downward trend than FBX, as Drewry does not include premium charges in its assessment of spot rates during peak periods.
Unlike FBX, Drewry's Shanghai-Los Angeles assessment shows no recent uptick. The freight rate assessed by Drewry last Thursday was US$6,985/FEU, the lowest since June 2021. This is a 44% decrease from the historical high at the end of November 2021, but is still 4.2 times higher than the freight rate in the same period in 2019.
Image source: Xinde Maritime
Drewry's Shanghai-New York assessment price last Friday was US$9,774/FEU. The price has been relatively stable in the past two weeks, but the latest assessment price is the lowest since June 2021, which is the same as last year's September It has dropped by 40% from the peak in mid-month.
Image source: Sindh Maritime
S&P Global: East coast rates are 50% higher than west coast
Daily assessment by S&P (formerly Platts) shows the uniformity rate (FAK) gap between North Asia-West Coast and North Asia-East Coast getting bigger and bigger.
S&P Global assessed the North Asia-East Coast FAK freight rate last Friday at $9,750/FEU, an increase of 2.6% from the recent low on July 29. Spot freight rates on this route have broadly leveled off since late April, according to the index.
The North Asia-West Coast freight rate assessed by S&P Global last Friday was US$6,500/FEU, which is still gradually declining and is already the lowest since the end of June 2021.
Since May this year, the freight rate gap between North Asia and the east and west coasts has been widening. The current freight rates on the east coast are 50% higher than those on the west coast.
Image source: Sindh Maritime
Griffiths said: "East coast freight rates are significantly higher than the west coast because of congestion."
Port congestion remains severe
Matthew Cox, chief executive of shipping company Matson, said earlier this month: "Last autumn, we I saw more than 100 ships waiting at the anchorage or offshore to enter the ports of Los Angeles and Long Beach . There are still 100 ships waiting, but the crowding has been moved to different ports and distributed in different places.”
In late July, in. The number of ships waiting at all North American ports exceeds 150.
This number changes daily, fluctuates hourly as ships enter and leave the queue, and is now down 15% from its peak, but is still an all-time high.
As of Monday morning, there were 130 ships waiting at sea. Among them, ships blocked in ports along the eastern United States and the Gulf of Mexico accounted for 71% of the total, and the number on the west coast dropped to only 29%.
On Monday morning, the largest number of boats was near Savannah, Georgia, with 39, and there were more just a few days ago. According to data from Hapag-Lloyd, there were 48 container ships near Savannah on Friday, with waiting times of 14-18 days.
The lines around Los Angeles/Long Beach have all but disappeared. On Monday morning, only 11 container ships remained, according to the Southern California Shipping Exchange queue list. This number has not been this low since November 2020, reaching a high of 109 ships on January 9.
Spot freight rates are expected to continue to fall, and the market is orderly.
At Maersk 's quarterly conference call last Wednesday, Chief Financial Officer Patrick Jany said that port congestion has caused a significant decline in spot freight rates, predicting that in the next few years will fall further every month.
Jany said: "In the past few months, we have seen spot freight rates drop and then rise many times. This decline is expected to continue. However, when the freight rates stop falling, they will stabilize at a level higher than before the epidemic. "High levels and above our cost levels"
During logistics provider Kuehne+Nagel's latest quarterly conference call, CEO Detlef Trefzger predicted that freight rates would eventually stabilize at two to three times pre-pandemic levels. .
According to Matson's Cox, spot freight rates are slowly adjusting and there is no sudden cliff-like drop. We expect an orderly market for the remainder of the year, with vessels continuing to operate at nearly full capacity.
This article comes from "Xinde Maritime", author Su Wan
