11 Jan Major forwarders engage in fierce bidding wars in China to secure equipment and space for North Europe.
Major forwarders engage in fierce bidding wars in China to secure equipment and space for North Europe.
And several carriers reported opening first- and second-round tenders this month with the highest bidders for guaranteed shipment.
Carriers are inviting offers for available slots on end-January sailing from Shanghai, Ningbo, Qingdao, and Yantian, with all-in bids below $16,000 per 40ft H/C for the UK and $10,500 for Rotterdam, Antwerp, and Le Havre unlikely to succeed.
Meanwhile, today’s Shanghai Containerized Freight Index (SCFI), which does not include additional premium fees to guarantee equipment and space, saw it’s North Europe component gain another 9% to $4,452 per teu, an astonishing 344% higher than last year’s week.
Spot rates for Mediterranean ports were stable at $4,298 per teu, but remain 265% higher than a year ago.
Most forwarding contacts The Loadstar spoke to this week saying they expected rates from Asia to Europe to fall after China’s new year holiday, starting on 12 February, especially as carriers have unusually blanked very few sails this year. Nobody predicts a crash, though.
One UK source said he expected rates to fall “slightly below $10,000” for 40ft after CNY, but didn’t think the market would see “all 2021 below $6,000.”
Carriers expect the high rates to continue until August – “so shipping lines can profit from Christmas stock that normally departed in June/July.”
Moreover, shippers hoping to secure much cheaper deals for annual contracts are in for a shock, in terms of new deals being offered by their carriers, who are currently unsurprisingly reluctant even to open negotiations.
Noting that the China Containerized Freight Index, tracking contract rates, is currently 89 percent higher than last year, SeaIntelligence’s Lars Jensen suggested that annual contract rates are no longer immune to spot-rate spikes.
“We are now in an environment with substantial and rising pressure on contract rates, too,” he said.
Otherwise, the SCFI’s U.S. west and east coast components were stable after last week’s decline, with spot rates from Asia to the west coast at $4,019 per 40ft and east coast ports at $4,750 per 40ft.
Jon Monroe of Washington State-based Jon Monroe Consulting highlighted the unreflected hidden fees in the SCFI index.
“These come in the form of premium space protection charges, another $2,500 to $3,000 a box,” he said. “In one carrier, the cancellation fee requires payment of ocean freight plus premium fees.”
Meanwhile, the volume of imports destined for US ports is apparently not let-up. According to Los Angeles port optimizer data, manifested cargo due on vessels scheduled to arrive next week, at 177,235 teu, is 102 percent higher than last year’s same week, with the following week set to be 94 percent higher, year after year, at 143,727 teu.