Ocean Carriers Scramble as GRIs Hit a Wall

By Alison Koo (The Loadstar) –

Blanked sailings and general rate increases (GRIs) have failed to arrest the drop in Asia-North Europe freight rates, with slot utilisation less than 95% amid the post-Chinese New Year slack period.

On Friday, the Shanghai Containerised Freight Index showed a 16% fall (from the week prior to the holiday on 29 January) in Asia-North Europe freight rates to $1,805 per teu.

And a Linerlytica report today says sailings blanked to date haven’t kept pace with the drop in cargo volumes from most Far East origins.

It adds: “Although Hapag-Lloyd announced a speculative rate hike at the end of last week, to raise rates to $2,500/teu and $4,100/40ft from 1 March, there is strong market resistance, with capacity utilisation still at less than 95% and the post-holiday blank sailing programmes mostly ending by this week.”

The reduction in cargo volumes in North Asia after Chinese New Year has helped to ease the congestion at Chinese and South Korean ports, with vessel capacity at anchorages halving from its recent peak of more than 1.2m teu in January.

With 30% to 60% of the regular capacity departing from Chinese ports blanked in the past two weeks, vessel activity has slowed considerably, allowing ports to recover from the recent high volumes.

Asia-Mediterranean rates have held up better, dropping 5% from pre-CNY, to $3,036/teu. This has been attributed to niche carriers diverting tonnage from the Mediterranean to serve demand for connections to the Red Sea.

Transpacific rates, which averaged $3,932/40ft for Shanghai-US west coast and $5,490/40ft for Shanghai-US east coast on Friday, will also come under pressure.

Linerlytica said: “Although carriers have filed 1 March GRIs ranging from $1,000 to $3,000 per 40ft, after failing to secure any of the mid-February hikes, they will face familiar resistance, with capacity returning en masse from all alliances after the February blanked sailing programmes.”

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