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Transatlantic Spot Rates Tread Water as Chinese Export Rates Tumble

FILE PHOTO: Containers are seen at the Yangshan Deep-Water Port in Shanghai, China October 19, 2020. REUTERS/Aly Song//File Photo

Transatlantic Spot Rates Tread Water as Chinese Export Rates Tumble

The Loadstar
Total Views: 818
December 9, 2022

By Mike Wackett (The Loadstar) –

Navigating the container spot rate market has become a minefield for shipper procurement managers under pressure from bosses to get the best deal in the market.

On the Asia-North Europe tradelane, the published spot indices all agree rates are falling by double-digit values week on week, but there is a considerable difference in the readings.

For example, Drewry’s WCI North Europe component fell 14% this week, to $1,686 per 40ft, while Xeneta’s XSI lost 15%, to $2,126, and the Freightos Baltic Exchange (FBX) shed 11%, to $3,530.

Meanwhile, The Loadstar has sighted FAK inclusive rate offers from alliance carriers this week, down to $1,300 per 40ft, from all Chinese ports to all UK and north continental ports, and valid until 31 December.

And more unsolicited rates from China-based forwarders have arrived in The Loadstar’s inbox and spam folders this week, offering rates down to $1,000 per 40ft via all main alliance carriers and to all North European hub ports.

The validity of these extremely low rate offers is questionable, however, as it appears some unscrupulous forwarders are fishing for new business based on anticipated rate reductions by carriers.

One shipper The Loadstar spoke to this week said his company were not taking these ‘offers’ seriously, as there was no guarantee of space. He added: “We will only book against an e-mail offer from a carrier that is quoting our contract number.”

Elsewhere, on the transpacific, according to the spot indices, the pace of the rate decline has slowed for Asia to the US west coast, with the WCI down 2% on the week to $1,997 per 40ft, the XSI declining by 5% to $1,519 and the FBX losing 1.6% to $1,403.

On the Atlantic coast, however, both the WCI and the FBX recorded 9% falls in their Asia-US east coast components, to $3,993 and $3,368 per 40ft, respectively.

For ocean carriers, the sole remaining jewel in the crown, in terms of demand and elevated spot rates, is the transatlantic tradelane, where a combination of a strong dollar and US retailers opting to source more product from Europe rather than China, is keeping the market buoyant.

This week’s WCI reading for spot rates from North Europe to the US east coast edged down 1%, to $7,151 per 40ft, while the XSI declined by 2%, to $7,146.

However, the FBX North Europe to US east coast component slipped by almost 5%, to $6,056 per 40ft.

The strength of the market has prompted carriers to upgrade their tonnage on the route and has seen weekly capacity boosted by new entrants to the trade.

It has also encouraged carriers to take advantage of the robust market with the introduction of rate hikes and surcharges. For instance, CMA CGM advised this week it would introduce a PSS (peak season surcharge) of $1,500 per 40ft for shipments from North Europe to US east coast ports, effective 20 December.

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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