Container shortages and increasing rates add to shipper woes
Asia to US rates are expected to climb higher next week as vessel operators
impose yet another general rate increase (GRI) on 15 September with container
shortages compounding shippers’ difficulties even as capacity has increased.
Jensen, CEO of Sea Intelligence, said that capacity on the Asia to US West
Coast is up 20% year-on-year, while capacity to the US East Coast has increased
almost 25% over last year.
consultant Jon Monroe expects next week’s GRI will stick and that rates to the
West Coast could crash through the US$4,000/FEU mark while East Coast boxes
will pay in excess of US$5,000/FEU.
There is no light at the end of the
combined capacity increase and historical rate highs will make the third
quarter a record quarter for the shipping lines,” claimed Monroe, adding “There
is no light at the end of the tunnel, yet.”
In US trucking suffering from equipment
rises are at least in part due to the shortages of equipment in China and
Monroe reports that in the US trucking is also suffering from equipment
have bottlenecks with the supply chain, equipment imbalances with a shortage of
40ft high cube containers in Asia and a shortage of chassis in the US,”
explained the consultant.
about how many barrels to produce or how many ships to sail have to be made in
advance. And the lack of demand visibility is a big contributor to China-US
ocean freight rates doubling to the West Coast since June, and passing
US$4,000/FEU to the East Coast – which was surprising as most analysts thought
that rates and profits would freefall,” reported the joint analysis.
Container rates have a floor no matter
the market conditions
management of container space via the alliances has become more agile, and the
carriers’ new pricing tool means that “container rates have a floor no matter
the market conditions and shippers will likely need to get used to this fact”.
rate increases in June, were caused by demand creating backlogs and rollovers,
“and the decision to restore capacity relatively slowly was a function of poor
data visibility (as well as some endemic lag time that can’t be removed from an
industry banking on the repositioning of 24,000TEU vessels). This directly
contributed to the speed and possibly the size of the rate spike,” concluded
the joint analysis.
Rate for a 40ft container
of today’s FBX (10 September) US West Coast costs are still rising with the
daily rate for a 40ft container out of Asia to California recorded at
US$3,720/FEU, while East Coast box rates are at US$4,472/FEU.