Supply chain radar: Mid-game gambits – the next moves in DSV + PAN vs CMA CGM + Ceva
I am afraid this is a quick and dirty take with no numbers at all ...
Maersk Line has revised its FAK rate from Asia to North Europe to match that of rival carrier CMA CGM.
The rate is the same, at $1,800 per 40 ft, however it becomes effective a week earlier, on Tuesday (18 September).
Meanwhile, Hapag-Lloyd and others are endeavouring to implement higher rates from the end of the month, the German carrier proposing a per feu rate of $2,000.
According to this week’s World Container Index (WCI) from Drewry, the Asia to North Europe spot rate component was $1,662 per feu, which is 3% down on the previous period.
The aggressive rate stance taken by CMA CGM and Maersk on the route, as well as others less publicly, including MSC, is due, The Loadstar understands, to a particularly bearish sentiment on forward booking prospects.
One carrier told The Loadstar it was “very concerned” at the weakness of its bookings after the Chinese Golden Week holiday in early October.
“We are enjoying a top-notch peak season and we have had some success in pushing rates up, but the outlook isn’t so good,” he said.
“It confirms the need for all the blanked sailings, and we are all very grateful for the 2M pulling out one of its big loops,” he added.
According to Alphaliner, 2M “will pay a heavy price for the move” in ceding market share to its rivals.
The “temporary suspension” of the AE2/Swan service, one of the 2M’s biggest loops, will also concern its slot charterers, Maersk subsidiary Hamburg Süd and South Korean carrier HMM.
And in HMM’s case, its Asian shippers exporting to UK will face further connection challenges following its decision to drop its direct Southampton call on its standalone service from last month.
The knock-on impact of the raft of blanked westbound sailings and 2M’s service withdrawal will be further pressure on backhaul space from November onwards, and several UK shippers now fear a return of the capacity squeeze that followed the alliance reshuffle in April 2017, which resulted in cargo rollovers and skyrocketing rates.
Elsewhere, the transpacific carriers are still reaping the benefit of a strong peak season, boosted by a pre-tariff hike rush on US imports from China, which has enabled carriers to push through several GRIs.
In its weekly commentary, the Freightos Baltic Index (FBX) said space on the route was “very tight” for China-US shipments, with a three-to-four-week backlog of containers having built up.
According to the WCI, spot rates on the transpacific are around 60% higher than a year ago, the current Asia to US west coast rate at $2,362 per 40ft and east coast ports at $3,610 per 40ft.
“With Golden Week festivities due to start at the beginning of October, carriers will be hopeful they can implement at least one more round of increases before the slack season begins,” said Patrik Berglund, chief executive of crowd-sourced benchmarking platform Xeneta.
As it stands, carriers have announced new GRIs on the tradelane for 1 and 15 October.
However, all bets are off after the tariffs begin to bite, said Mr Berglund, given the comprehensive range of the Trump administration duty increases that shipping association BIMCO estimates could put more than a quarter of transpacific container trade at risk.