Latest news with #PeterSand
Yahoo
08-08-2025
- Business
- Yahoo
Nothing can stop falling trans-Pacific container rates: Analyst
Ocean container spot rates on the benchmark Far East-U.S. route moderated their steep declines that saw an average 53% drop since June to destinations on the East and West coasts. The latest update from shipping consultant Xeneta has market average spot rates from the Far East to U.S. West Coast at $2,098 per forty foot equivalent unit (FEU), down 3% from July 31, and $3,311 to the East Coast, 9% lower in that time. Those declines compared to a 62% decrease to the West Coast since June 1, and 53% to the East Coast since June 15, after falling a further 9% since June 31, to $2,015 per FEU. 'Carriers have taken action to arrest the plummeting average spot rates on the trans-Pacific trade to the U.S. West Coast through strong capacity management, with blanked sailings now almost double the level in mid-June,' said Peter Sand, Xeneta chief analyst, in a research note. 'The dramatic spot rate decline has slowed in August so the stronger capacity management is having some success for carriers, but this is limited and not enough to stop the downward trajectory in coming months. 'With significant overcapacity in the global container shipping fleet and a muted forecast for demand, keeping spot rates elevated will be like holding back the tide, no matter how hard carriers try.' The four-week rolling average of blanked sailings from the Far East to the U.S. West Coast has increased from 30,000 TEUs per week on June 22 to 57,000 TEUs on August 1. And because no change in supply chains occurs in a vacuum, logistics providers have observed that the increased blankings have contributed to an uptick in serious ongoing congestion issues at some of the busiest Chinese container ports. That's led to loaded boxes sitting on the docks, they said, as shippers use the ports as de facto warehouses while awaiting vessel capacity. Xeneta said market average spot rates from the Far East to North Europe were $3,330 per FEU; and $3,372 from the Far East to the Mediterranean. Far East to North Europe rates flattened after increasing 78% between May 31 and July 1, and prices are down 2% since then. Average spot rates from the Far East to the Mediterranean have declined a further 7% since July 31, and 26% since June 15. The spread in average spot rates on Far East trades to North Europe and the Mediterranean are near equal at $42 per FEU. On June 1 that number was $1,765. Since its container volumes to Europe remained strong through much of the summer, some observers have speculated that China was selling goods at drastic discounts, to keep its factories running after U.S. tariffs amounted to an embargo with its most important trading partner. Find more articles by Stuart Chirls containers post best FY since pandemic Maersk raises guidance on higher Q2 volumes Container rates unmoved by latest tariff deadline Shipbuilder sued by owner, operator of ship in deadly Baltimore bridge collapse The post Nothing can stop falling trans-Pacific container rates: Analyst appeared first on FreightWaves. 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
Yahoo
30-06-2025
- Business
- Yahoo
Container rates from key US trade partner plummet 39%
The latest weekly ocean container shipping market reveals a stark contrast in rate movements across major trade lanes, as the trans-Pacific trade from the Far East to the United States saw a dramatic decline. The market average according to analyst Xeneta on Far East to U.S. West Coast services has fallen significantly since a spike on June 1. Declining spot rates have all but erased that recent surge, with rates standing at $3,317 per forty foot equivalent unit on June 27, up just 6% from May 31, effectively neutralizing the recent upward trend. This trade lane is particularly impacted by the U.S.-China trade war, and it is evident that capacity is now more than meeting demand, empowering shippers to push back against peak season surcharges by carriers. In contrast, the market average on the trade from the Far East to the U.S. East Coast has seen a more moderate decline, falling 9% since June 1 to $5,990 per FEU. Despite this drop, the spot rate remains 43% higher on June 27 than on May 31 with the spread between the coasts reaching $2,673, the highest in 10 months. 'Average spot rates have plummeted from Far East to U.S. West Coast, down 39% since June 1, but it has not been so dramatic into the US East Coast with rates holding up stronger – for now,' said Peter Sand, Xeneta chief analyst, in a note. 'The trans-Pacific into U.S. West Coast is the key battleground for carriers when it comes to China exports, so spot rates have fallen harder and faster as they prioritized bringing capacity back onto this trade in the immediate aftermath of the lowering of 145% tariffs.' Meanwhile, average spot rates from the Far East into the Mediterranean and North Europe, which experienced jumps in early and mid-June, remain elevated. On June 27, rates to the Mediterranean were 5% higher and to North Europe 14% higher compared to June 1, indicating sustained demand in these regions. The trade from North Europe to the U.S. East Coast has seen little change, with the market average staying flat from a week ago at $2,105 per FEU. This represents only a 3% increase from May 31. This trade lane is currently influenced by negotiations between the European Commission and Washington on a new trade agreement before July 9, when a 90-day pause on higher tariffs is set to expire. 'Shippers are seeing how this game is playing out and are calling the carriers' bluff by pushing back on the higher rates and peak season surcharges,' said Sand. 'It is only a matter of time until shippers do the same into the U.S. East Coast and spot rates begin to fall sharply there too.' Find more articles by Stuart Chirls maritime chief 'not a big fan' of ocean carriers' 'approach' as agency reviews antitrust immunity Drewry: No 'lasting impact' from tariff break as ocean rates fall again With Mideast shipping on high alert, Maersk re-opens Israel portMaersk unveils new AI platform to simplify customs tasks The post Container rates from key US trade partner plummet 39% appeared first on FreightWaves.
CNBC
23-06-2025
- Business
- CNBC
Middle East ocean freight rates soar on Iran conflict, Strait of Hormuz shipping risks
Ocean freight rates to the Port of Khor Fakkan in the United Arab Emirates are surging as Israel continues to attack Iran and after a weekend which saw U.S. strikes on Iranian nuclear targets. Rates from Shanghai to the Khor Fakkan, which is situated on the UAE Indian Ocean coastline, are up 76% in comparison to mid-May, according to spot ocean freight rate data tracked by freight intelligence platform Xeneta. The average spot rates have reached $3,341 per forty-foot equivalent unit (FEU.) The Port of Khor Fakkan is located outside the Strait of Hormuz. Due to its location, the port is considered to be one of the most important transshipment hubs for the Arabian Gulf, the Indian Sub-continent, the Gulf of Oman, and the East African markets. "Shippers in the region have acted with caution as the level of risk has gradually increased," said Peter Sand, chief shipping analyst at Xeneta. "Shippers have been frontloading cargo in the most recent months, to bolster the supply chain from adverse disruptions to the flow of containerized goods." The Port of Khor Fakkan has had 81 vessels arrive within the past 24 hours, and 51 ships are expected to arrive in the next 30 days, according to VesselFinder. The conflict in the Middle East has elevated vessel security risks, which have added to operational costs. Vessels are also moving faster, which results in more fuel being used, which also adds to costs. Iran's parliament voted to approve a closure of the Strait of Hormuz on Sunday, but it may not follow through on the move, according to many experts. It is expected to target ships for attack or seizure as part of its retaliatory plans, including ships showing a public U.S. affiliation, according to maritime security firm Ambrey. One major oil tanker operator, Frontline, recently said it would accept no new contracts requiring travel in the Strait of Hormuz. The oil market and stock market reactions to the escalation in the conflict were muted on Monday, without major moves in either trade. But Sand said the spread in ocean freight rates is a leading indicator of risk and uncertainty. The spread refers to the difference between spot market rates and long-term contract rates. The higher the spread, the greater the indication of market volatility and potential risks for shippers. "During times like this, the spread in the market widens," said Sand. It is up from $50 to $1,101 over the past 40 days (May 14 to June 23), according to Xeneta. "The spread is showing the difference between what the smaller shippers, those without much negotiation power, versus the freight rates paid by the larger and stronger shippers," he added.
Yahoo
06-06-2025
- Business
- Yahoo
New world order: Ocean rates up 88% as shippers pounce on lower tariffs
It took one week for the frenzy to set in on the eastbound trans-Pacific. 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 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 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.
Yahoo
21-05-2025
- Business
- Yahoo
Trans-Pacific Freight Rates Soar as China Cargo Bookings Rebound
The 90-day reduction in tariffs on Chinese imports have sent bookings out of the country soaring almost immediately—and ocean spot freight rates are following suit. Numerous indices tracking rates on the trans-Pacific trade lane are seeing abrupt spikes in the cost to move cargo out of China toward to the U.S. More from Sourcing Journal US Footwear Manufacturers Tell Trump Tariffs Should Fund Onshoring Resurgence Trump Says US Will Set Tariff Rates For Trade Partners Canada Cools US Trade Tensions By Drawing Down Retaliatory Duties The Shanghai Containerized Freight Index (SCFI) released Friday said deliveries from Shanghai to U.S. West Coast ports soared 32 percent from the week prior to an index rate of $3,091 per 40-foot container. The Shanghai-to-U.S. East Coast route saw a healthy 22 percent week-over-week jump to $4,069. Drewry's World Container Index (WCI) saw weekly Shanghai-to-New York sailings take the highest growth rate at 19 percent to $4,350 per 40-foot container (FEU), while trans-Pacific routes reaching Los Angeles shot up 16 percent to $3,136 on average. For Drewry, both routes buoyed the total WCI composite across eight major East-West trade lanes, which increased 8 percent from the week prior, to $2,233 per container. Xeneta's newest data released Friday had Far East-to-U.S. West Coast average rates reaching $2,722 per FEU, with average East Coast-bound rates at $3,883. 'There is no time to waste for these shippers and the rush of cargo will put upward pressure on spot rates on trans-Pacific trades,' said Peter Sand, chief analyst at Xeneta, in a weekly update. 'Spot rates will peak and then flatten as carriers redeploy capacity to match demand, then rates will begin to slide again just as we saw in Q1. This is expected to happen over the next two to four weeks.' With rates naturally increasing due to the quick turnaround in ocean freight demand, container shipping liners no longer have to resort to artificially propping yields up by cutting capacity via methods like blank sailings or vessel swapping. According to Drewry's container capacity insight online tool, blank sailings from Asia to the West Coast of North America will decrease 28 percent month-on-month from 33 in May to 24 in June. The number of blank sailings from Asia to the East Coast of North America will decrease from 23 in May to 17 in June, a 23 percent drop. This will result in double-digit increases (or returns) of ship capacity to these trades, after the recent cuts. 'It is a feature of the current volatile macro-environment that ocean carriers are 'cancelling cancellations' of sailings,' Drewry said in a post on LinkedIn. 'We notice that the container shipping market is reacting to trade policy announcements with swings in trade volumes, capacity volumes and spot prices, similarly to the stock market.' CMA CGM, which saw freight bookings for China exports to the U.S. get cut by 50 percent after President Donald Trump began his escalation of tariffs on April 3, is another ocean carrier seeing the quick rebound in bookings. 'Trade will restart on this route very, very vigorously in the coming weeks and months,' said CMA CGM chief financial officer Ramon Fernandez during a first-quarter earnings call, calling the duty rollback an 'indisputably positive signal for maritime transport.' 'Everyone is expecting trade in June to be much more active than was feared just a few days ago,' said Fernandez. The carrier, which plans to invest $20 billion into the U.S. throughout Trump's presidency, posted a 12.1 percent increase in revenue to $13.3 billion in the first quarter on net income of $1.1 billion. Volumes carried ticked up 4.2 percent to 5.85 million 20-foot equivalent units (TEUs). Additionally, the French shipping conglomerate gave more color on the anticipated U.S. port docking fees on Chinese ships, with Fernandez indicating 'we will organize ourselves in order not to have to pay these fees.' He added that less than half of the company's 670 vessels were built in China. Fernandez said Ocean Alliance partners including China's Cosco Shipping and would adapt to the fees, although he did not say what the wider impact would be to the vessel-sharing agreement. CMA CGM has added peak season surcharges on trans-Atlantic trips to the U.S. as the tariff situation remains at an impasse. From June 1, all cargo headed for the U.S. from northern Europe will carry an extra fee of $400 per TEU or $800 per FEU. And from June 15, cargo from Mediterranean ports to the East and Gulf Coast will get a $500 surcharge. Maersk is slapping peak charges on China- and east Asia-originated cargo to U.S. and Canada as well, hitting them with an extra $1,000 per TEU and $2,000 per FEU. 'Given the tighter capacity on the trans-Pacific, ocean carriers are in the driver's seat to push freight rates meaningfully higher,' said Jefferies analysts in a research note Tuesday.
