Ocean freight rates from Asia-Europe, which saw an early peak season starting in April, are now falling as European import demand decreases. Asia-North Europe rates have dropped by $2,700 per FEU since July, although they remain four times higher than last year. Asia-Mediterranean rates have also fallen steeply.

A global freight forwarder noted the pulling forward of shipments due to extended transit times via the Cape of Good Hope. Subsequently, August bookings were robust, but September registered a -10% drop despite a strong Q4 forecast as indicated by customers.

Peter Sand, chief analyst at Xeneta, noted that vessel load factors out of Asia to Europe were at 95% in the second quarter and expects full ships and high rates for the rest of the year. However, the capacity squeeze would not persist because of the frontloading of shipments. He observed that carriers were not blanking sailings despite reaching peak capacity in August, adding that the trade lane had found “a balance between supply and demand”.

Sea-Intelligence Maritime Analysis warned of growing volatility in weekly capacity operated on the Asia-Europe trade. The analyst advised cargo owners to plan carefully even if pro-forma schedules indicate sufficient capacity.

Source: Journal of Commerce