THE ocean freight container shipping market is peaking, but shippers’ challenges persist.
Recent data from Xeneta showed that on July 15, the cost to ship a large container from the Far East to the US East Coast increased by 3.7 percent to $10,045. The rate to the US West Coast rose by 2.0 percent or to $8,045. These increases are lower than the hikes on July 1, at 22 percent and 12 percent, respectively.
“Xeneta data shows some ocean container carriers are still pushing spot rate increases in mid-July, but for the first time in a long time, some carriers are offering lower spot rates,” Emily Stausbøll Xeneta, senior shipping analyst, said.
A container vessel berthed at the Manila International Container Terminal Inc. in the Port of Manila. PHOTO FROM MICT
She added, “This suggests a growing level of available capacity in the market and indicates that shippers can once again start to play carriers off against each other — instead of feeling they need to pay whatever price they are offered to secure space.”
The market’s peak is also evident in the “mid-high” data from Xeneta, showing flat rates at the high end for trades from the Far East to the US. This indicates carriers may need to reduce rates to compete for volumes.
Spot rates from the Far East to North Europe and the Mediterranean increased by 4.7 percent and 3.5 percent, respectively, on July 15, but these are smaller than those in July.
She added, “Port congestion is easing, more ocean container shipping capacity is becoming available, and it looks likely that the frontloading of imports seen earlier this year will lead to a slacker traditional third quarter peak season.”
While signs of a peak in spot rates offer some relief, shippers still face significant costs, with rates up by nearly 400 percent to the US West Coast and over 300 percent to the US East Coast.
The Red Sea conflict, leading to detours around the Cape of Good Hope, remains a major factor. Unless there’s a significant shift back to the Suez Canal, the situation may persist, though some market softening is possible, as seen in earlier months.
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