Container spot rates fell slightly, while long-term rates continued to increase

In the last week, container spot freight rates have decreased slightly, however, long-term freight rates have increased by more than 90% compared to the same period last year.

container-freight-rates

Long-term container freight rates increased by more than 90% over the same period last year.

The Drewry's World Container Index (WCI) fell 0.2% in the week ended September 30 to $10,360.87/FEU, still about 291.8 percent higher than the previous one. A year ago. The average freight rate index fell, after moving sideways last week, marking stability after 22 consecutive weeks of gains.

The overall weekly decline was driven by the transpacific route with Shanghai-Los Angeles rates falling 2% to $12,172/FEU, still up 198% year-on-year. While the freight rate of goods imported from Los Angeles - Shanghai fell 1% last week to 1,383 USD/FEU.

Spot rates from Asia to Northern Europe increased, specifically, the Shanghai - Rotterdam route increased 1% at 14,558 USD/FEU, with an increase of 535% over the same period last year.

“Drewry expects rates to remain steady in the coming week,” the analyst said.

The stabilization of spot freight rates coincides with the announcement of CMA CGM shipping line that its spot rates will be freezed until February 1 next year.

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Container ship CMA CGM (Photo: CMA)

The change in approach was noted by Xenata CEO Patrik Berglund. “However, with rates already so high there’ll no doubt be many shippers viewing this as ‘crumbs from the rich man’s table’… and let’s see if any freezes do take hold within the broader carrier community,” he remarked.

While container spot rates may have stabilized eventually, Xenata said the impact on long-term rates continues to be felt with a further 3.2% increase in September so far. increased to 91.5%.

Xenata has little evidence that fundamentals are weakening and rates are forecast to remain strong.

“This year has seen a unique convergence of Covid-19 disruption, port congestion, strong demand and maxed-out capacity, and that has stoked the flames of record-breaking rates,” explains Berglund. “The global supply chain is under immense pressure and desperate shippers have no choice but to pay up to secure deliveries, or at least try to, ahead of key trading periods such as Christmas. It’s a crazy market out there."

Xenata notes that with the market tilting in favor of shipping lines, they are looking to attract customers with long-term bookings, some even offering multi-year deals with shipments guaranteed.

"Shippers are treading carefully in this regard, but there is some appetite for longer-term commitment – raising the question of whether both parties might look beyond the traditional tender?" Berglund said.

It should be noted that long-term contracts account for 60% of Maersk's bookings.

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