March 10, 2023
On the Asia-Nordic trade lane, the published spot indices all agree that interest rates are falling at double-digit rates every week, but there is considerable variation between readings.
For example, last week Drewry’s WC Nordic portion fell 14% to $1,686 per 40 feet, while Xeneta’s XSI fell 15% to $2,126, and Freightos Baltic Exchange (FBX) fell 1% to $3,530 Meanwhile, last week it was seen that the FAK offered by alliance carriers included rate concessions from all Chinese ports to all UK and North Continent ports as low as $40 per 1,30 feet , valid until December 31. Last week, more unsolicited offers from Chinese freight forwarders one – rates offered through all major alliance carriers and all Nordic hub ports were as low as $40 per 1,000 feet.
However, the validity of these extremely low rate quotes is questionable as some unscrupulous freight forwarders seem to be looking for new business based on the reduced rates expected by carriers.
The shipper said his company did not take the “proposals” seriously because there was no space guarantee, adding: “We will only make reservations based on quotes for electronic parts from carriers that reference our contract number. Elsewhere, in the Transoceanic region, Asia-to-US West Coast rates eased on a spot basis, with WC down 2% this week at $1.97 per 40 grass days, XS down 5% at $1519 and FBX down 1.6% at $1.403
However, on the Atlantic coast, the Asian American East Coast component of WC| and FBX both fell 9% to $3.993 and $3.368 per 40 feet, respectively.
For ocean carriers, the only remaining pearl in terms of demand and spot rate increases is the transatlantic stay, and the combination of a strong dollar and US quarterly sellers choosing to source more products in Europe rather than China is keeping the market active, with spot WC| readings from Northern Europe to the US East Coast down slightly 1% last week to $7.151 per 40 feet, while XSI fell 2% to $7.146.
However, the FBX Nordic to US East Coast portion slipped nearly 5% to $6.056 per 40 feet.
The strong momentum in the market has prompted carriers to upgrade their tonnage on this route and see weekly capacity increase due to new entrants.
It encourages carriers to take advantage of the strong market by introducing interest rate hikes and surcharges. For example, the CMA CGM said this week that it will impose a charge of every 40 feet on cargo from Northern Europe to U.S. East Coast ports starting Dec. 2022.$1,500 PSS (Peak Season Surcharge).