Latest news with #PeterSand
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.
Yahoo
16-04-2025
- Business
- Yahoo
Analyst warns of ‘carnage' on shifts in container shipping
Significant shifts in the container shipping marked by record-breaking capacity and unexpected rate increases are pointing to potential severe near-term disruptions. Capacity from the Far East to North Europe is set to reach an all-time high in mid-April, according to data from analyst Xeneta. This surge surpasses the previous record set during the height of pandemic disruptions in November 2021, when capacity hit 336,800 twenty-foot equivalent units. Simultaneously, average spot rates on this route had increased by 4.8% as of Tuesday, reaching $2,457 per forty-foot equivalent unit. The Mediterranean route has seen an even steeper rise, with rates jumping 6.8% to $3,270 per FEU. 'We are looking at record-breaking container shipping capacity leaving the Far East for North Europe this week, which means carriers know something is boiling,' said Peter Sand, Xeneta's chief analyst, in a research note. 'This suggests a nervous market, but the demand must also be there to put upward pressure on rates.' The unusual combination of increased capacity and rising rates during what is typically a slack period has led to speculation about the influence of tariffs on trade flows. Sand suggests that shippers may be redirecting goods from the Far East to Europe instead of the United States, where tariffs on some Chinese imports have reached 245%. While the Far East to Europe routes are seeing increases, other major trade lanes show different trends: Far East to U.S. East Coast rates remain steady at $3,951 per FEU. Far East to U.S. West Coast rates hold at $2,910 per FEU. North Europe to U.S. East Coast rates are unchanged at $2,158 per FEU. Year to date, all fronthaul trades have seen significant rate decreases, ranging from 20% for North Europe to U.S. East Coast to 50% for Far East to U.S. West Coast. That comes as carriers announce general rate increases and surcharges in an effort to shore up prices. Adding to the complex market dynamics is port congestion in North Europe. Antwerp in Belgium, Le Havre in France, London Gateway and Germany's Hamburg are experiencing heavy congestion due to various factors including weather, crane maintenance and labor unrest. Sand warns of potential 'carnage' when the record capacity from the Far East arrives in North Europe, given the average transit time of 55 days. 'As we saw in 2021, congestion is toxic for ocean container shipping and can quickly spread across global supply chains.' Find more articles by Stuart Chirls considering making port fees more affordable for Chinese ships: Report 'Tariff shockwave' leads to collapse in ocean container bookings Early container rush ahead as Asia-Pacific defies global growth slowdown Port of Seattle appeals housing plan it says threatens trucking, cargo movement The post Analyst warns of 'carnage' on shifts in container shipping appeared first on FreightWaves.
