Shipping container rates from East Asia and China to the US West Coast fell this week, according to ICIS. This may cause some telcos who were planning to increase their general rate (GRI) for December 1 to reconsider.
Also read: Container rates steady as Asia and Europe rise and Pacific weakens
Rates from Freightos were down 6% from the previous week but up 6% to the East Coast.
After managing capacity and October GRIs for a while, rates are back under downward pressure, said Freightos head of research Judah Levine.
“Since October, container carriers have faced downward pressure on rates from both seasonally stagnant demand and growing capacity in major east-west trades,” Levin said. However, by directing significant steps to reduce capacity, they managed to push through the mid-October GRIs that rescued rates from two-year lows and lifted prices again with a November 1 rate hike.
While weekly rates showed single-digit declines, Levin said daily rates “have fallen more than 20% so far this week to around $2,100/FEU (40-feet equivalent unit), which has erased November’s gains and is now back to GRI’s bullish mid-October level.”
While Freightos showed a weekly increase in Asia-USEC rates, this trade route is also under pressure.
“East Coast daily prices have also fallen more than 20% so far this week to around $3,000/FEU, returning to pre-October GRI levels,” Levin said. “Some operators have scheduled December GRIs, but may reconsider given the sharp pullback this week.”
Lars Jensen, head of consultancy Vespucci Maritime, said spot rates on the New York Freight Forwarding Index (NYFI) show sharp differences in sub-trades from Asia to the United States.
From Asia-USWC, rates rose $609/FEU from China, $367/FEU from SE Asia and $389/FEU from East Asia.
But for 20-foot containers (TEU) it was a more mixed bag as China rose $57/TEU, Southeast Asia fell $25/TEU and Northeast Asia rose $744/TEU in just one week, Jensen said.
Jensen said the USEC rate is quite different from Asia. Forty-foot containers saw rates rise by $160/FEU from China, Southeast Asian rates by $50/FEU and Northeast Asian rates by $226/FEU. Twenty-foot containers rose $160/TEU from China. From SE Asia, rates increased by $58/TEU, but NE Asia rates fell by $175/TEU.
“It shows not only a somewhat unfavorable market in the Pacific, but how conditions can be quite different on the sidelines,” Jensen said.
Container ships and shipping container costs are related to the chemical industry because while most chemicals are liquid and transported in tankers, container ships carry polymers such as polyethylene (PE) and polypropylene (PP) in pellets. Titanium dioxide (TiO2) is also transported in containers. They also carry liquid chemicals in isotanks.
Source: IndexBox Market Intelligence
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