Ocean carriers are taking full advantage of late demand for holiday season goods to move from Asia to Europe and the US to successfully implement FAK and GRI rate hikes.
Moreover, Asia-Europe carriers are tightening the screw by cancelling advertised voyages on the route.
“During the first week of November, to cash in on the expected uptick in demand before the Christmas holidays, the carriers implemented GRIs on the east-west routes originating from Asia,” says Drewry in its World Container Index (WCI) commentary.
Forwarders and NVOCCs have received notification of non-contract November rates from carriers for the first half of the month which, in the case of Asia to North Europe, appears to be averaging out at around $150 per teu, with the likelihood of another wave of increases for 15 November.
Meanwhile, The Loadstar has received from OOCL, a member of the Ocean Alliance, the first official notification of a blanking programme on the Asia-Europe tradelane: the Loop 3 sailing of the CSCL Uranus from Ningbo, China, to North European ports scheduled for 18 November.
Our sources suggest that the other two alliances, 2M and THE, will shortly announce similar blanking programmes.
Carriers, particularly on the Asia to Europe tradelane, need to protect recent spot rate gains, and if possible push the market rates up higher, as they prepare for a fresh round of annual contract negotiations.
After dipping below $700 per teu in mid-October, spot rates from Asia to North Europe have recovered in the past few weeks. The North Europe component of the Shanghai Containerized Freight Index (SCFI) gained a further 4.7% this week to $779 per teu, and for Mediterranean destinations, rates ticked up by 3.1% to $660 per teu.
There was no repeat of the double-digit spot rate gain of the previous week on the transpacific, as the market took a slight breather. Nevertheless, rates on the route are still trending up, boosted by robust demand, with the SCFI showing a gain of 2.4% for Asia to the US west coast, to $1,548 per 40ft, and rates to the east coast edging up slightly to $2,089 per 40ft.
Ocean carriers are scheduled to receive a further 13 ultra-large container vessels (ULCVs) of 18,000 teu-plus before year-end, according to data from vesselsvalue.com, but it is thought that many of these deliveries will be rolled over into next year.
They will then combine with the 28 other 18,000 teu vessels stemmed for delivery next year, potentially heightening the overcapacity situation in the liner industry.
However, the container lines have become more judicious in managing their tonnage since the formation of the new alliances and to mitigate the impact of the arrival of newbuild tonnage they will continue with their proven strategy of off-hiring chartered in ships to compensate for the new arrivals.