A view shows stacked shipping containers at the port of Felixstowe, Britain, October 13, 2021. Picture taken with a drone. REUTERS/Hannah McKay

Rising Rates and Capacity Problems for Shippers Frustrated by Skipped Port Calls

The Loadstar
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October 15, 2021

By Mike Wackett (The Loadstar) –

Container spot rates from Asia to the US have re-gained traction after China’s Golden Week holiday, while rates to Europe appear to have plateaued and could ease over the coming weeks.

Both tradelanes are still experiencing acute capacity issues, with a high percentage of tonnage idled, awaiting berths at chronically congested US and North Europe hub ports.

According to today’s reading of the Freightos Baltic Exchange (FBX), Asia-US components, the spot rate for a 40ft to the US west coast jumped by 8.5% on the week, to $17,377.

For east coast ports, the spot rate increased by 6.5%, to repass the $20,000 marker at $20,695 per 40ft.

The FBX reading for North Europe was virtually unchanged, at $14,492 per 40ft, with the spot for Mediterranean ports ticking up marginally, to $13,361 per 40ft.

On the transatlantic, the FBX reading for North Europe to the US east coast inched up to $7,219 per 40ft, having already soared by 230% since the end of March as carriers’ redeployed capacity to other routes, despite strong demand forecasts.

Indeed, according to forwarding contacts, space from North Europe remains “very tight”, with one UK forwarder telling The Loadstar today that the wait for space on US loaders is “about three weeks minimum – longer with some lines”.

The tight capacity situation and high rates on the transatlantic have encouraged Zim to return to offering liner services from North European ports after an absence of more than five years. The Israeli carrier’s first sailing to the US east coast will be by the 4,250 teu Seaspan Dalian from Antwerp on 1 November.

Notwithstanding the capacity constraints on transatlantic services, exporters from North Europe continue to suffer from booking restrictions to the Middle East and Asia, as carriers prioritise empty container restitution over loaded exports.

Carriers are also restricting export reefer bookings. For example, MSC advised customers this week its level of acceptance of reefer container bookings from Europe to the Middle East and Asia “will be reduced for some weeks”.

The carrier said that the restriction was necessary “in view of the persistent delay impacting the turnover of equipment on the trade”.

And the increasing number of ship diversions in North Europe is adding to problems for exporters experiencing booking cancellations, due to the last-minute decisions by carriers to skip ports.

The decision to omit scheduled port calls due to berthing delays, while succeeding in turning ships around in North Europe at a quicker pace, is creating a build-up of frustrated exports and cancelled empty evacuations at several ports.

While the port of Felixstowe’s well-documented quay and landside congestion issues have been attributed to the HGV crisis in the UK, the diversion of ships to other European hubs has also contributed, as the number of uncollected Asia-bound empties has grown.

And the decision by Maersk and others to divert vessels to other North European hubs has attracted criticism from a number of The Loadstar’sforwarder contacts. The MD of one UK forwarder told The Loadstar today it was “a growing nightmare.

“I can understand that the lines will want to utilise the hubs to avoid delays at UK ports, but the cynical side of me says they will use this to massage their statistics to indicate they are making great strides to keep on schedule,” he said.

The Loadstar is known at the highest levels of logistics and supply chain management as one of the best sources of influential analysis and commentary.

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