Shippers' ocean freight budgets 'about to explode' as rates hit new highs

12:13am 2nd September 2020

http://dashboard.fps-group.net/news/news__020920_FPS_ratesexplod_NEWS.jpg

SHARE THIS ARTICLE

Facebook

Twitter

LinkedIn

Ocean freight budgets for shipments from Asia to the US and Europe are going through the roof as carriers prepare yet another round of freight rate increases.

Today’s Shanghai Containerized Freight Index (SCFI) recorded further gains for the transpacific and Asia-Europe tradelanes, taking its combined reading up another 7% for the week, to 1,263.26, which is 54% higher than a year ago.

Container spot rates from Asia to the US east coast, as recorded by the SCFI, jumped $254 per 40ft, to take the rate to $4,207, well beyond the 2018 trade war high of $4,000.

And rates to the west coast jumped $198, to $3,639 per 40ft – another record for the tradelane and a massive 125% higher than recorded for the same week of last year.

“Demand was strong enough to push rates up, even with cancelled sailings restored and carriers adding temporary and even new permanent services on the lane,” said Freightos CMO Eytan Buchman.

“With reports of rolled shipments and container shortages out of China indicating the extent of the demand rush, carriers will likely introduce another China-US GRI for September, which would be the sixth in just three months,” said Mr Buchman.

In his weekly US import update report, Jon Monroe, president of Jon Monroe Consulting and a representative for Worldwide Logistics, said the big US retailers were “experiencing a major surge in online orders”, and were converting many of their stores to fulfilment centres.

He said, however, that the substantial freight price hikes were taking their toll.

“Importers’ budgets are ballooning and, in some cases, about to explode from having to pay the extremely high cost of transport,” said Mr Monroe. “The record high rates will undoubtedly cause bankruptcies in the worst case, and major budget excesses in the best case, scenarios,” he warned.

Elsewhere, on the Asia to Europe tradelane, shippers are also up against it with spot rates jumping – albeit not to the extent as on the transpacific – containers being rolled – even on premium rates – and equipment shortages reported at depots.

Carriers on the route are preparing to roll out increased FAK rates on 15 September; for example CMA CGM will add $200 to the price of taking a 40ft box from Asia to North Europe, to take the rate to $2,500.

But according to a Chinese NVOCC report this week to The Loadstar, Maersk’s spot rates to from Shanghai North Europe have hit $2,760 per 40ft.

“And even when you pay these rates, there is a two-to-three-week delay before shipment,” said the contact. Maersk Spot and premium products from other carriers are now being quoted significantly higher than the market spot rate.

The North Europe component of the SCFI recorded a further 10% increase this week, to take the spot rate to $1,029 per teu, while rates to Mediterranean ports moved ahead another 6% to $1,060 per teu.



Source: theloadstar.com

12:31am 28th August 2020
The basics of container stowage planning and why it is so important

In view of the recent incidents relating to stack collapses on board and containers lost at sea, I t...

Read more

4:32am 27th August 2020
5 Things to Consider when Choosing a Freight Forwarder

Freight forwarders are a dime a dozen. A quick Google search will show that there’s no shortage of...

Read more

4:46am 25th August 2020
Why Peak Season 2020 Is a New Chance

Every summer and early fall, shippers and carriers around the globe begin to prepare for the peak sh...

Read more

12:59am 21st August 2020
The Hidden World of the LCL Consolidation Market

The practice of consolidation through less than container load (LCL) shipping of cargo - which invol...

Read more

Our Partners


Copyright 2020 © FPS Group All right reserved.