Golden Week Gloom: Container Spot Rates Tumble Across East-West Trades

By Gavin van Marle (The Loadstar) – With the Chinese Golden Week holiday beginning next Wednesday, there was little surprise that spot rates on the main east-west ocean trades continued to decline this week.

However, the levels at which they ended the week will be of great concern to carriers struggling to maintain pricing at break-even.

This week saw a mixture of double-digit and high single-digit declines on the transpacific and Asia-Europe trades, as well as the traditionally more stable transatlantic.

This week’s World Container Index (WCI) from Drewry saw the spot rate on its Shanghai-Rotterdam leg slip a further 9%, to end at $1,735 per 40ft, a level approaching the pre-Red Sea crisis nadir of $1,442 in mid-December 2023.

Today’s Shanghai-North Europe base port leg on the Shanghai Containerised Freight Index (SCFI) was also disappointing, with a quoted spot rate of $1,942 per 40ft, an 8% drop on the week before.

It was similar picture on the Asia-Mediterranean trade, the WCI’s Shanghai-Genoa leg down 7% on last week, to fall below the $2,000 mark and end at $1,990 per 40ft.

“Ocean carriers are reducing capacity to align with slowing demand ahead of China’s Golden Week holiday, when factories will be shut for eight days” Drewry noted. “As a result, freight rates are expected to continue declining in the coming week.”

Hence yesterday’s announcement from Hapag-Lloyd that it was preparing to introduce a new general rate increase (GRI) of $1,200 per 20ft and $2,000 per 40ft on shipments from all Far East ports of origin to North Europe.

On the Far East-West Mediterranean, the GRI will be $1,750 per 20ft and $2,500 per 40ft, while for the East Mediterranean it varies between $1,800 and $2,150 per 20ft depending on destination region, and $2,600-$2,700 per 40ft.

Meanwhile, MSC will introduce a peak season surcharge on the westbound transatlantic trade, on the same date, with a quantum of $400 per 20ft and $600 per 40ft.

After several weeks of stagnant rates, the WCI’s Rotterdam-New York route declined 6% week on week, to end at $1,819 per 40ft. And it was a similar picture on the transpacific, the Shanghai-Los Angeles leg down 10%, to $2,311 per 40ft, and Shanghai-New York lost 8% on the previous week, to finish at $3,278 per 40ft.

One possible silver lining for carriers in their attempts to resurrect price levels may be the fallout from this week’s devastating Typhoon Ragasa, which closed factories and container supply chains across South China – with the weekend approaching, factories in the region may only be open for two more days before the Golden Week holiday starts.

Following the typhoon, Hapag-Lloyd warned customers that it could take up to a week to clear the cargo backlog in the region.

“The delays could be particularly disruptive for shippers still trying to move orders ahead of the Golden Week holiday in China,” said Freightos head of research Judah Levine.

“But, as many Asia-Europe shippers have likely already moved peak season goods, and with transpacific peak season pulled forward by tariff deadlines, the lull in demand expected in October could minimise the extent to which disruptions from the typhoon will be felt on the major tradelanes,” he added.

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