News / Slide in container freight rates may be beginning to level out

first_imgVanderWolf Images The China-US west coast component dropped 1.2% to $1,329 per feu, and the China-US east coast leg by just 0.8% to $2,338 per feu, which suggests that the significant declines seen on the transpacific trades since the beginning of the year could be coming to an end.Carriers have kept a tight lid on capacity additions, underscored by the news this week that the 2M Alliance and Zim are to blank a forthcoming Asia-US east coast sailing. But it appears flat demand has similarly dampened pricing.George Griffiths, editor of S&P Platts Global Container Freight Market, told The Loadstar: “In general, rates on key ex-Asia head-hauls have seen some significant weakening, and all signs have pointed to the slow recovery of the Chinese industry, post-Chinese New Year.“Exports over the course of the first quarter slipped significantly, with importers in the US having front-loaded ahead of the potential tariffs at the end of last year, resulting in waning demand.“A similar picture has been painted on the Asia westbound routes, with importers in the UK and the north continent stockpiling goods ahead of March 29, when the UK was due to leave the European Union.“As a result, demand has waned significantly into March, resulting in a largely sluggish recovery in rates, not due to hit their January levels until mid-April to early May.”However, rates may have difficulty picking up next month or thereafter, as the Asia-North Europe trade is set to receive a pretty hefty injection of capacity this year.Alphaliner this week calculated that capacity on the route will increase by 8.3% to 300,000 teu a week from next month, compared with 277,000 teu at the same point last year.“The planned addition of capacity on this route in April could put freight rates under further pressure, with capacity utilisation on the Asia-Europe route failing to recover from the dip in February,” it added. Freight rates on the major east-west container trades continued to slide this week – although the precipitous fall during previous weeks has finally begun to flatten out.According to this week’s Shanghai Containerised Freight Index (SCFI), the freight rate from China to North Europe has dipped below the $700 per teu mark, down some 4.2% week on week to today’s $684 per teu.Rate levels on the China-Mediterranean leg also declined, by 2.1%, to end the week at $732 per teu.Declines were also seen on routes from China to the US west and east coasts, although similarly the previous rate of decline has almost flattened out.center_img By Gavin van Marle 22/03/2019last_img

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