New world order: Ocean rates up 88% as shippers pounce on lower tariffs
Mid-high average spot rates paid by shippers in the 75th percentile of the market for transit from the Far East to the U.S. East Coast have surged by an astonishing 88% since May 3, according to analyst Xeneta, now standing at $6,100 per forty-foot equivalent unit. This price jump reflects the willingness of shippers to incur higher costs to ensure the movement of goods, driven by the temporary window created by the U.S.-China reciprocal tariff pause.
In that time, the Far East to U.S. West Coast average price tracked at $5,082 from $2,615 per FEU.
The North Europe to U.S. East Coast average spot rate increased to $2,129 from $2,081 the previous week.The 90-day respite from higher duties has led liner operators such as Cosco, Evergreen, Hapag-Lloyd and HMM to amplify their spot rate charges, Xeneta said, pushing for hikes as steep as $3,000 per FEU.
Meanwhile, mid-high spot rates have also climbed by 67% from the Far East to the U.S. East Coast, reaching $7,180 per FEU by early June, as a significant number of businesses attempt to expedite shipments amid volatile trade conditions. The Far East to U.S. West Coast price was $6,100 per TEU.
However, the price dynamics are not limited to the trans-Pacific trade. The mid-high shipping rate on the Far East to North Europe route has also seen an upward trend, rising by 32% since the end of May and currently priced at $2,704 per FEU. This increase occurs despite the four-week rolling average capacity offered on this trade lane hitting 346,000 TEUs as of June 5, a level not witnessed even during the peak of the COVID-19 pandemic shipping rush.
'The 88% increase in market mid-high spot rates on the trans-Pacific trade shows shippers are so concerned about getting goods moving again during the 90-day window of opportunity of lower tariffs that they are willing to pay more,' said Xeneta Chief Analyst Peter Sand, in a note. 'Right now, it seems carriers are telling shippers to jump, and some are replying, 'How high?''This spike in rates, according to Sand, is a temporary phenomenon. With capacity returning to the trans-Pacific route, the frantic rush of shipments is expected to subside. As supply chains gradually recover and inventories grow, the pricing pressures will diminish. Sand anticipates that spot rates will reach their peak in June before descending as capacity constraints ease.
Additionally, the fluctuations in the trade have ripple effects on other routes, such as Far East to North Europe. Although indirectly affected by the U.S.-China tariff situation, this route feels the impact of global supply chain uncertainties.
'What happens in one region can quickly ripple across global supply chains,' Sand said. The looming threat of increased capacity pressure alongside geopolitical unpredictability is enough to push up spot rates even in these distant markets.
Find more articles by Stuart Chirls here.New week sees ocean container rates soarDirtier ports will hurt jobs, US maritime revival: AAPA
Texas port completes $625M ship channel deepening project
'Fear and uncertainty' driving up China-US container rates
The post New world order: Ocean rates up 88% as shippers pounce on lower tariffs appeared first on FreightWaves.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Yahoo
10 minutes ago
- Yahoo
Qantas fined $59M for illegal pandemic layoffs
MELBOURNE (AP) — A judge on Monday fined Qantas Airways 90 million Australian dollars ($59 million) for illegally firing more than 1,800 ground staff at the start of the Covid-19 pandemic. The penalty is in addition to the AU$120 million ($78 million) in compensation that Australia's biggest airline had already agreed to pay its former employees. Australian Federal Court Justice Michael Lee said the outsourcing of 1,820 baggage handler and cleaner jobs at Australian airports in late 2020 was the 'largest and most significant contravention' of relevant Australian labor laws in their 120-year history. Qantas agreed in December last year to pay AU$120 million ($78 million) in compensation to former staff after seven High Court judges unanimously rejected the Sydney-based airline's appeal against the judgment that outsourcing their jobs was illegal. The Transport Workers Union, which took the airline to court, had argued the airline should receive the largest fine available — AU$121,212,000 ($78,969,735). Lee ruled that the minimum fine to create a deterrence should be AU$90 million ($59 million), noting that Qantas executives had expected to save AU$125 million ($81 million) a year through outsourcing the jobs. Lee questioned the sincerity of Qantas's apology for its illegal conduct, noting that the airline later unsuccessfully argued that it owed no compensation to its former staff. 'If any further evidence was needed of the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune,' Lee said. "I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers,' Lee added. Qantas chief executive Vanessa Hudson, who was the airline's chief financial officer during the layoffs, said in a statement after Monday's decision: 'We sincerely apologize to each and every one of the 1,820 ground handling employees and to their families who suffered as a result.' 'The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families," she said. 'Over the past 18 months we've worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost,' she added. Lee ruled that AU$50 million ($33 million) of the fine go to the union, because no Australian government agency had shown interest in investigating or prosecuting Qantas. 'But for the union … , Qantas' contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct,' Lee said. 'Hence the union has brought to the attention of the court a substantial and significant transgression of a public obligation by a powerful and substantial employer,' Lee added. A hearing will be held at a later date to decide where the remaining AU$40 million ($26 million) of the fine will go. Michael Kaine, national secretary of the union that represents 60,000 members, said he felt vindicated by Monday's ruling, which ends a five-year legal battle that Qantas had been widely expected to win. 'It is a significant — the most significant — industrial outcome in Australia's history and it sends a really clear message to Qantas and to every employer in Australia: Treat your work force illegally and you will be held accountable,' Kaine told reporters. 'Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won,' Kaine added. Qantas has admitted illegally dealing with passengers as well as employees in its responses to pandemic economic challenges. Last year, Qantas agreed to pay AU$120 million ($78 million) in compensation and a fine for selling tickets on thousands of cancelled flights. The Australian Competition and Consumer Commission, a consumer watchdog, sued the airline in the Federal Court alleging that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been canceled. Rod Mcguirk, The Associated Press Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Washington Post
12 minutes ago
- Washington Post
Qantas fined $59M for illegal pandemic layoffs
MELBOURNE — A judge on Monday fined Qantas Airways 90 million Australian dollars ($59 million) for illegally firing more than 1,800 ground staff at the start of the Covid-19 pandemic. The penalty is in addition to the AU$120 million ($78 million) in compensation that Australia's biggest airline had already agreed to pay its former employees. Australian Federal Court Justice Michael Lee said the outsourcing of 1,820 baggage handler and cleaner jobs at Australian airports in late 2020 was the 'largest and most significant contravention' of relevant Australian labor laws in their 120-year history. Qantas agreed in December last year to pay AU$120 million ($78 million) in compensation to former staff after seven High Court judges unanimously rejected the Sydney-based airline's appeal against the judgment that outsourcing their jobs was illegal. The Transport Workers Union, which took the airline to court, had argued the airline should receive the largest fine available — AU$121,212,000 ($78,969,735). Lee ruled that the minimum fine to create a deterrence should be AU$90 million ($59 million), noting that Qantas executives had expected to save AU$125 million ($81 million) a year through outsourcing the jobs. Lee questioned the sincerity of Qantas's apology for its illegal conduct, noting that the airline later unsuccessfully argued that it owed no compensation to its former staff. 'If any further evidence was needed of the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune,' Lee said. 'I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers,' Lee added. Qantas chief executive Vanessa Hudson, who was the airline's chief financial officer during the layoffs, said in a statement after Monday's decision: 'We sincerely apologize to each and every one of the 1,820 ground handling employees and to their families who suffered as a result.' 'The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families,' she said. 'Over the past 18 months we've worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost,' she added. Lee ruled that AU$50 million ($33 million) of the fine go to the union, because no Australian government agency had shown interest in investigating or prosecuting Qantas. 'But for the union … , Qantas' contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct,' Lee said. 'Hence the union has brought to the attention of the court a substantial and significant transgression of a public obligation by a powerful and substantial employer,' Lee added. A hearing will be held at a later date to decide where the remaining AU$40 million ($26 million) of the fine will go. Michael Kaine, national secretary of the union that represents 60,000 members, said he felt vindicated by Monday's ruling, which ends a five-year legal battle that Qantas had been widely expected to win. 'It is a significant — the most significant — industrial outcome in Australia's history and it sends a really clear message to Qantas and to every employer in Australia: Treat your work force illegally and you will be held accountable,' Kaine told reporters. 'Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won,' Kaine added. Qantas has admitted illegally dealing with passengers as well as employees in its responses to pandemic economic challenges. Last year, Qantas agreed to pay AU$120 million ($78 million) in compensation and a fine for selling tickets on thousands of cancelled flights . The Australian Competition and Consumer Commission, a consumer watchdog, sued the airline in the Federal Court alleging that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been canceled.
Associated Press
42 minutes ago
- Associated Press
Qantas fined $59M for illegal pandemic layoffs
MELBOURNE (AP) — A judge on Monday fined Qantas Airways 90 million Australian dollars ($59 million) for illegally firing more than 1,800 ground staff at the start of the Covid-19 pandemic. The penalty is in addition to the AU$120 million ($78 million) in compensation that Australia's biggest airline had already agreed to pay its former employees. Australian Federal Court Justice Michael Lee said the outsourcing of 1,820 baggage handler and cleaner jobs at Australian airports in late 2020 was the 'largest and most significant contravention' of relevant Australian labor laws in their 120-year history. Qantas agreed in December last year to pay AU$120 million ($78 million) in compensation to former staff after seven High Court judges unanimously rejected the Sydney-based airline's appeal against the judgment that outsourcing their jobs was illegal. The Transport Workers Union, which took the airline to court, had argued the airline should receive the largest fine available — AU$121,212,000 ($78,969,735). Lee ruled that the minimum fine to create a deterrence should be AU$90 million ($59 million), noting that Qantas executives had expected to save AU$125 million ($81 million) a year through outsourcing the jobs. Lee questioned the sincerity of Qantas's apology for its illegal conduct, noting that the airline later unsuccessfully argued that it owed no compensation to its former staff. 'If any further evidence was needed of the unrelenting and aggressive litigation strategy adopted in this case by Qantas, it is provided by this effort directed to denying any compensation whatsoever to those in respect of whom Qantas was publicly professing regret for their misfortune,' Lee said. 'I do think that the people in charge of Qantas now have some genuine regret, but this more likely reflects the damage that this case has done to the company rather than remorse for the damage done to the affected workers,' Lee added. Qantas chief executive Vanessa Hudson, who was the airline's chief financial officer during the layoffs, said in a statement after Monday's decision: 'We sincerely apologize to each and every one of the 1,820 ground handling employees and to their families who suffered as a result.' 'The decision to outsource five years ago, particularly during such an uncertain time, caused genuine hardship for many of our former team and their families,' she said. 'Over the past 18 months we've worked hard to change the way we operate as part of our efforts to rebuild trust with our people and our customers. This remains our highest priority as we work to earn back the trust we lost,' she added. Lee ruled that AU$50 million ($33 million) of the fine go to the union, because no Australian government agency had shown interest in investigating or prosecuting Qantas. 'But for the union … , Qantas' contravening conduct would never have been exposed and it would never have been held to account for its unlawful conduct,' Lee said. 'Hence the union has brought to the attention of the court a substantial and significant transgression of a public obligation by a powerful and substantial employer,' Lee added. A hearing will be held at a later date to decide where the remaining AU$40 million ($26 million) of the fine will go. Michael Kaine, national secretary of the union that represents 60,000 members, said he felt vindicated by Monday's ruling, which ends a five-year legal battle that Qantas had been widely expected to win. 'It is a significant — the most significant — industrial outcome in Australia's history and it sends a really clear message to Qantas and to every employer in Australia: Treat your work force illegally and you will be held accountable,' Kaine told reporters. 'Against all the odds, we took on a behemoth that had shown itself to be ruthless and we won,' Kaine added. Qantas has admitted illegally dealing with passengers as well as employees in its responses to pandemic economic challenges. Last year, Qantas agreed to pay AU$120 million ($78 million) in compensation and a fine for selling tickets on thousands of cancelled flights. The Australian Competition and Consumer Commission, a consumer watchdog, sued the airline in the Federal Court alleging that Qantas engaged in false, misleading or deceptive conduct by advertising tickets for more than 8,000 flights from May 2021 through to July 2022 that had already been canceled.
