The maritime shipping industry is witnessing significant changes as spot rates surge across major trade routes. According to the latest report from the Voice of the Independent, the Asia-North America trade lane has experienced double-digit spot rate increases for the first week of July, a trend that is expected to continue beyond October’s Golden Week.
Drewry’s World Container Index (WCI) has reported a week-on-week growth of 12 percent on Shanghai-Los Angeles trades. The average rates per 40-foot container are now hovering around the $7,727 mark. Xente, another major player, recorded average rates for the headhaul trade at $8,500.
However, these increases have not been uniform across the US. For instance, Shanghai-New York services saw a 7 percent increase against the final week of June, bringing the rate to $9,158 per 40-foot container.
Similar Trends on Asia-Europe Trades
The spike in rates on the Asia-North America trades is mirrored on the Asia-Europe trades. The WCI for the Asia-Europe leg recorded an 8% increase. Even within the last week of June, there was significant growth on headhaul tradelanes. Many industry insiders viewed this as a continuation of an upward trajectory rather than a temporary blip.
The WCI for the week ending June 30 showed rates up seven percent, week-on-week at $7,322 per 40-foot container, reflecting Xente’s rate of $6,909.
Shippers and forwarders are not banking on the current slowdown lasting. Many are already fixing slots at higher rates, ranging from $9,500 to $9,800 per 40-foot container across all current trades, either side of mid-July. If this is indeed the peak for the traditional low season, exporters should brace themselves for FAK rates potentially hitting $14,000.
Peak Season Surcharges and New FAK Levels
Forwarders are starting to manage shippers’ expectations amidst ongoing disruptions. A new series of peak season surcharges (PSS) and new freight all kinds (FAK) levels were implemented on July 1. Among the notable changes, Hapag-Lloyd, who predicted an early peak season, has implemented a $1,500 per 40-foot PSS on its East Coast India trades. This surcharge is culminating in a $1,500 PSS on its Oceania-North Europe trades.
An early July PSS surcharge of $500 per 40-foot has also been applied to its Asia-Europe trades. Asia shipments to the U.S. West Coast saw an average $800 per 40-foot increase, with an upfront rate hike on the Shanghai-Rotterdam leg.
Positive News for Some Shipping Lines
While these surges are notable, there is some good news for the industry. Certain shipping lines have reported a decrease in rates, providing some relief amidst the generally rising costs. This highlights the dynamic nature of the market and the importance of staying informed and adaptable.
GLC Inc. remains committed to offering the best rates and services to our clients. We provide multiple options to fit each budget, ensuring that you receive the most cost-effective and reliable shipping solutions. Our team is dedicated to helping you navigate these challenging times with confidence and ease. Visit us for any quote request and we will be glad to help you.