After climbing steadily the previous week, average spot rates for containers moving from Asia to the United States shifted into decline, as machinations in the trade play havoc with capacity and schedules.
Far East to U.S. West Coast rates were $2,322 per forty foot equivalent unit (FEU) as of Sept. 11, according to consultant Xeneta, while Far East to U.S. East Coast was $3,190 per FEU.
This comes as average spot rates from the end of August into the West Coast are up 27.1%, and 11.8% to the East Coast.
The spread in average spot rates between the coasts of $868 per FEU, said Xeneta, shows their ‘normal’ relationship is out of balance after rising as high as $1,027 per FEU on August 31. The imbalance will reverse when current conditions ‘calm down,’ as carriers adjust to fast-moving tariff and trade uncertainty.
“Carriers are swapping out China-built vessels on services into the U.S. ahead of United States Trade Representative port fees coming into force [in October],” said analyst Peter Sand. “This could be one of the factors behind increasing spot rates on trans-Pacific trades.”
Sand said that it’s unclear whether the tonnage swaps will lower capacity or blanked sailings, “but it will cause disruption with the potential to impact rate development.”
Gemini [the cooperation between Maersk (OTC: AMKBY) and Hapag-Lloyd (GER: HLAG.DE)] is swapping out a total of 60,000 TEUs across six China-built vessels on the US2 service, Sand said, which calls at both the U.S East and West coasts.
“It’s clear this is a concerted effort to minimize China-built TEU on these trades.”
Rates have held steadier on the trans-Atlantic where the average spot rate is down just $3 per FEU, or 0.2%, from last week and $50 per FEU, 2.6%, from August 31.
North Europe to U.S. East Coast was $1,838 per FEU as of Sept. 11.
The average spot rate from Asia into the Mediterranean is off 8.1% since the end of August, and 12.9% into North Europe. From a week ago, the average rate is down 1.7% and 2.2% into the Mediterranean and North Europe.
Spot rates into the Mediterranean and North Europe have now been consistently falling since mid-June and early-July.
“On August 1, average spot rates on trades from Far East to North Europe and Mediterranean were completely aligned, but that spread has now increased to $500 per FEU,” said Sand. “This is a fascinating story because the spread is caused by North Europe falling harder while the Mediterranean is holding firmer on both short- and long-term markets. One factor is found in stronger demand at ports in the Western Mediterranean, which is helping to hold spot rates up in comparison to North Europe.”
Find more articles by Stuart Chirls here.
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