Analysts at HSBC Global Research said container spot rates could sustain at their current levels for a while as the Panama Canal transit limitation and upcoming general rate increases (GRIs) could further support spot rates.

In a statement, the independent research arm of HSBC noted that the Shanghai Containerised Freight Index (SCFI) soared 6.5% week-on-week. 

"During 2Q23 result briefings, K+N [Kuehne+Nagel] and DSV unanimously echoed shipping lines' view that 3Q peak season may not arrive this year, while HPHT pinned volume recovery hopes in 4Q23 due to slower-than-expected inventory depletion in the US in 3Q23,"  HSBC Global Research said.

It noted that, on the other hand, Mitsui OSK (MOL) expected spot rate recovery would only begin next year or later.

"With an unexciting demand outlook in 3Q23, we think capacity discipline will be key to sustain rates," the report said.

HSBC Global Research noted that the move of Panama Canal to limit transit to 32 total ships daily from July 30 and a general rate increase (GRI) of US$1,000/FEU on the Transpacific head haul route from August 1 could lend further support to spot rates near term.

The US National Retail Federation's expectation of record back-to-class shopping this year could also help inventory destocking.

"Should spot rates sustain till August, the industry may avoid losses," HSBC added.

Meanwhile, the report noted that dry bulk vessels rates diverge with the Baltic Dry Index (BDI) jumping 12% week-on-week on July 27, hitting a four-week high, with a 27% uptick in Capesize but slides of 15% in Panamax and 3% in Supramax.

The HSBC report noted that while Capesize's strength was driven by strong iron ore exports from South America, weakness in Panamax is likely due to Russia's exit from the Black Sea Grain deal.

"China Politburo meeting on July 24 emphasised further optimisation and adjustment of housing policies, which should improve the sentiment of property-related sectors. We think the demand for construction materials could be revived when concrete measures follow, boding well for demand for dry bulk vessels," HSBC Global Research added.

Air freight rates on the way to normalisation

Meanwhile, the report pointed out that air cargo rates are on their way to normalisation.

It said that the Baltic Air Freight Index dropped 3% week-on-week due to weakness across almost all trade lanes.

"We see the trend of normalisation in air cargo rates as well, albeit at a much slower pace than rates for container shipping, driven by the continuous return of passenger belly capacity following China's reopening and modal shift back to container shipping as ocean transportation schedules improve and become more economic," HSCB Global Research said.