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FREIGHTOS: ASIA-EUROPE OCEAN RATES CONTINUE TO FALL WITH NEWBUILDS ARRIVING SOON
February 23, 2023
Freightos noted that with Lunar New Year now behind and and the industry enters the typical "ocean freight lull" until peak season, a lot of uncertainty remains as to what the rest of the year will look like.
Judah Levine, head of research, Freightos Group, said on the demand side, Transpacific import volumes continue to fall, and though "many projections and industry leaders anticipate an H2 rebound, some analysts are not as optimistic."
Newbuilds adding more capacity soon
"On the supply side — even with demand falling — a surge in new containerships from the record orderbook will start being delivered next month," he noted, adding that "at the same time, some observers expect about 25% of those orders to get postponed, and carriers are increasing the number of older vessel demolitions as ways to reduce capacity."
Levine noted that on the rates side, Transpacific prices dipped slightly to the West Coast and were stable to the East Coast last week, but remain about 90% lower than a year ago, and still below 2019 levels.
Meanwhile, Asia- North Europe rates fell 8% and are now more than 80% lower than last year.
The rate declines are reportedly putting carriers and shippers at odds as long-term Transpacific contract negotiations get underway, the Freightos head of research added.
Source: Freightos
Levine said with this, shippers are pointing to the spot market as the basis for lower contract rates, while carriers argue that inflation-driven cost increases mean prices will have to be adjusted upward.
In terms of air cargo, the Freightos chief researcher said some carriers are planning to increase ex-Asia capacity in anticipation of a rebound in demand.
In the meantime, demand remains subdued.
Freightos Air Index transpacific rates were US$3.64/kg last week, 70% lower than a year ago, with Asia - Europe prices at US$4.39/kg, 35% lower than last year.
