Container lines operating on Asia-Europe trades are “taking stronger measures” than usual to maintain the recent recovery in ocean freight prices by making major cuts to capacity in the weeks after Lunar New Year, according to ocean freight rates benchmarking specialist Xeneta.

And it appears that lines’ efforts to prop up ocean freight prices have been successful – so far. Since towards the end of 2016, the market has experienced a strong and sustained recovery, with container rates around 125% higher than they were around this time last year for Asia-Europe routes, Xeneta said.

But with overcapacity still not fully addressed, there are still uncertainties if the market is to return to being “truly a seller’s market”, the company noted. But reports from its sources indicated that carriers “are taking stronger measures to deal with overcapacity to make sure the market stays up”, Xeneta said. Xeneta sources are reported that lines were attempting to prop up prices by reducing westbound sailings by 33% in the week immediately after Lunar new year and by around 43% from full capacity next week.

“Whether this will keep the rates up, is still to be seen. However, liners are, for sure, taking ‘extra-than-usual’ measures to make sure the market remains in their favour,” Xeneta said. This behavior from carriers may mark a distinct difference compared with this period normally in previous years, when rates traditionally slide in the aftermath of Chinese New Year (CNY), the company added. “As we have reported earlier, long-term rate negotiations have been stalled or pushed from late last year as shippers are waiting to see how the market weighs out. Carriers have accepted this delay with perhaps strong confidence that CNY would not make much of a huge difference than pre-holiday.”

These reports from Xeneta’s sources on lines’ capacity management efforts supports this latter idea that lines will be successful in keeping rates relatively strong and stable in the coming weeks. “The weaker lines in the new alliances to start this year will also be able take advantage of the stronger alliances’ more efficient capacity management measures,” Xeneta noted. “It may stay a seller’s market after all – at least for some time.” Recent figures from the Shanghai Containerised Freight Index (SCFI) also support this conclusion. Spot rates on the major east-west container shipping trades have seen a rare period of stability in 2017 so far, with Asia-Europe and transpacific trades rates on the Shanghai Containerised Freight Index continuing to hold firm in the first week of February.

The latest SCFI, which uses Shanghai as a base origin port, shows rates to the US east coast from Asia at $3,639 per feu, have climbed by a marginal 0.1% over the previous week, while those to the US west coast fell by 0.7% to $2,092 per feu. And thanks to a spike in cargo ahead of an early Chinese New Year helped and carriers managing capacity much better than in the past, spot rates on the Asia-northern European and Asia-Mediterranean trades were also largely unmoved, falling 1.7% to $1,023 and rising 0.2% to $988 per loaded 20ft unit, respectively, Lloyd’s List reported.


BIFA - Industry News

Preparing for CDS Exports - MUCRs and MRNs

The main lessons of implementing CDS in the import environment is the need to plan and implement the necessary changes as early as possible. These lessons need to be applied to the export...


Member Consultation: Driving Licence Flexibility For Alternatively-Fuelled Vehicles

The current licensing flexibility permits drivers to operate slightly heavier goods vans than the typical weight entitlement, in order to allow for the extra weight of a cleaner power system, for...


UK Trade Tariff: Updates to Volume 3 Released

The new version contains important information regarding: Updated Document Identifier fields of the table used to provide details of how an Import of Products, Animals, Food and Feed (IPAFF)...


Transitioning To CDS - YouTube Tutorials

Further to our recent communications regarding CDS, HMRC has introduced a new series of videos to help you make declarations on the Customs Declarations Service. This series is a set of 9 videos on...


System downtime: NCTS affecting GVMS - 13 + 14 August

Dear Member As part of their on-going IT improvements, HMRC will be updating the following service: New Computerised Transit Service (NCTS) Please note: These will be individual 45 minute outages on...


TRADE WITH RUSSIA & THE UKRAINE - SANCTIONS & EMBARGOES

The UK government has imposed a range of sanctions measures, including trade and financial sanctions, under The Russia (Sanctions) (EU Exit) Regulations 2019 (“the Russia Sanctions Regulations”). In...


Air Cargo growth remains stable and resilient

Note: We returned to year-on-year traffic comparisons, instead of comparisons with the 2019 period, unless otherwise noted. Global demand, measured in cargo tonne-kilometers (CTKs*), was 6.4% below...


Temporary Closure of Inland Border Facilities (IBF) - 16-19 August 2022

If you need to attend an IBF during these periods, you must attend either Sevington or Holyhead IBF: Sevington IBF, Ashford, TN25 6GE Holyhead IBF, Parc Cybi, A55 Junction 2, Holyhead, LL65 2YQ If...


AAI Group Login

Cookies are small text files downloaded to your computer each time you visit a website. When you return to websites, or you visit websites using the same cookies, they accept these cookies and therefore your computer or mobile device.