Container rates on the transpacific edged down slightly last week just ahead of Lunar New Year (LNY) at a time of year when demand and rates typically increase, according to the latest report by Freightos.
In its FBX update, Freightos said prices to the West Coast have been relatively stable, decreasing 7% since the start of December, while East Coast rates have fallen 27% despite increases in blanked sailings.
"But carriers are now set to cancel even more sailings and remove about 50% of scheduled transpacific capacity over the LNY holiday, with reports that they may blank even more in the weeks to follow," it added.
The global freight booking and payment platform said early in 2020, as China's lockdown sent transpacific import volumes plummeting, carriers' extensive blanked sailing campaigns kept rates from collapsing.
It pointed out that for example, in March of 2020, import volumes from China dropped by about 40% from a year earlier, but capacity management kept rates to the US West Coast just 5% lower than in 2019.
"So carriers are hoping that the same strategy in the coming weeks will stabilize or even push transpacific prices back up somewhat even as demand continues to ease," commented Judah Levine, head of research at Freightos Group.
Meanwhile, Levine added that reports of overbooked Europe-bound vessels from Asia ahead of the holiday may indicate that blanked sailing campaigns are "succeeding" to match supply with falling demand on this lane.
"This trend may likewise be reflected in Asia - North Europe rates, which increased this week and remained nearly double their level in January 2020," the Freightos head of research added.
Meanwhile, the report noted that observers generally point to the formation of stable ocean alliances as a big reason for carrier success in managing capacity and preventing a rate collapse in early 2020.
"But this week, MSC and Maersk, the industry's two largest carriers, announced they would not renew their 2M alliance agreement when it expires at the end of next year, driving speculation that MSC might seek to operate on its own and raising questions as to what this will mean for Maersk and how it could shake up the other alliances," Levine added.
The Freightos report noted that Asia-US West Coast prices (FBX01 Weekly) dipped 3% to US$1,323/FEU for the period which is 91% lower than the same time last year.
Asia-US East Coast prices (FBX03 Weekly) also decreased 7% to US$2,626/FEU — also 84% lower than rates for this week last year.
Asia-Nort Europe prices (FBX11 Weekly), meanwhile, increased 15% to US$3,420/FEU, 77% lower than rates for this week last year, Freightos said.
