Pricing increases on the Trans-Pacific and Asia–Europe corridors have shored up global container spot rates, which saw their strongest weekly performance in several months. However, this rise is being led by carrier’s pricing actions than by underlying demand. At the same time, carriers are continuing capacity management efforts to keep supply tight.
As reported by gCaptain, the sharp rise in Drewry’s World Container Index was led by rates from China to the U.S., where carriers had introduced fuel-related and peak season surcharges, as well as general rate increases. These measures have been introduced by carriers to position themselves ahead of the upcoming peak season, reported Seatrade Maritime News.
Drewry expects rates to continue rising in the coming weeks. In a recent update, the analyst wrote, “The Asia-Europe peak season is expected to begin earlier than usual, as stronger cargo bookings, tight vessel capacity, and disruptions related to the U.S./Israel-Iran conflict are prompting shippers to move cargo sooner.”
As for the Trans-Pacific trade, data from Xeneta showed that while spot rates have remained unchanged for the past month, they stand approximately 50% higher than levels seen before the Middle East conflict. Peter Sand, Xeneta’s Chief Analyst, noted that U.S. shippers are increasingly relying on the spot market amid uncertainty that is delaying long-term contract commitments. He explained that postponed contracts shift more volume into the spot market, allowing carriers to command a premium. However, shippers may be prepared to accept higher short-term costs temporarily for a long-term gain. Sand noted, “But for shippers, the short-term pain is worth it if they ultimately secure lower long-term rates in the coming weeks.”
Sand said he expected this dynamic to shift gradually as new contracts are settled. “As new long-term contracts are finalized and come into force, volumes will shift back to contracted rates and that should translate into a softening of the short-term market. This will be gradual softening rather than a dramatic fall off a cliff edge back to pre-conflict levels, particularly ahead of the traditional peak season build-up later in the summer.”
Source: gCaptain, Seatrade Maritime News, Drewry, Xeneta