thOverloaded cabins, abandoned containers! Freight rates on European routes surge

Tighter shipping space also further increases the likelihood of shipping goods under long-term contracts.(wedge anchor through bolt)

The strong growth in demand on the Asia-Europe route seems to have exceeded the expectations of shipping companies and freight forwarders, and the tightening of space has further increased the possibility of shipping cargo under long-term contracts.

A European freight forwarder said that it has recently received a large number of inquiries from customers about space allocation, pointing out that contract rates are much lower than spot rates, and shipping companies usually give priority to cargoes with higher freight rates during busy periods. The freight forwarder emphasized that it is difficult to understand the current unusual situation.

wedge anchor,through bolt,wedge anchor product,concrete wedge anchors,stainless steel wedge anchors

As consumption continues to grow into the new year, European importers are now entering a period of restocking.(threaded rods & B7)

Maersk CEO Kevin Klein revealed in a recent first quarter earnings call with analysts that European importers have now entered a period of restocking. During this period, Maersk’s freight volume on European routes increased by 9%. Klein explained that this growth stems from the fact that the macroeconomic environment in Europe may not be ideal last year, which led to a reduction in inventory. With the continued growth in consumption as we enter the new year, European importers have now entered a period of restocking. Drewry World Container Index (WCI) shows that the spot freight rate from Shanghai to Rotterdam rose 2% week-on-week to $3,103/FEU. At the same time, the spot freight rate from Shanghai to Genoa also rose 3% to $3,717.6/FEU. In fact, many shippers may have paid higher freight rates to avoid cargo delays.

b7 threaded rod,b7 thread rod bolt,stud bolt anchor,thread bar

Because market demand exceeded expectations, and part of the capacity was absorbed by the diversion of the Red Sea(concrete screw)

A British freight forwarder said that the current surge in spot freight rates may be just the beginning, as market demand exceeds expectations and some capacity is absorbed by the diversion of the Red Sea. The freight forwarder expects that the volume will remain high in the second quarter as the peak season arrives, and the market may not cool down until the third quarter when new ships are delivered.

This week, new FAK rates were introduced on the Asia-Northern Europe route. MSC’s new rate for Northern European ports is $4,500/FEU from May 1. At the same time, Maersk also plans to significantly increase freight rates from May 11, and the peak season surcharge (PSS) will be increased from the current $500/FEU to $1,500/FEU, a two-fold increase.

The rationality of the rapid increase in surcharges in a short period of time has been questioned.(solar bracket & solar fixing)

A large European importer pointed out that in addition to the PSS, Maersk also imposed a trade disruption surcharge to cover the additional costs of bypassing the Cape of Good Hope. The importer questioned the rationality of the rapid increase in surcharges in a short period of time and expressed disappointment with the shipping company’s lack of communication on this issue. He further said that the various surcharge strategies of liner companies at present may be puzzling.

The shortage of space is mainly due to the postponement of voyages and delayed ship schedules, rather than blank sailings. According to sources, even if the cargo is arranged on the next postponed voyage, it may be delayed again because the carrier needs to load the previously abandoned cargo.

Another freight forwarder expressed concerns, saying that shipping companies would definitely use this situation to limit space allocation, resulting in a reduction in space for long-term contract customers. The freight forwarder pointed out that a carrier cut their space quota by 80% almost without warning, and customers could only obtain more space by accepting FAK or premium guaranteed pricing. Although they were not satisfied, they did not have much choice at present.

In addition, psychological factors that bother some shippers include misunderstandings about insufficient space and carrier blank sailings. They originally expected that freight rates would fall after the Spring Festival and budgeted logistics expenses accordingly.

In other major east-west trade routes, spot freight rates remained basically unchanged. Specifically, WCI’s Shanghai-Los Angeles route fell 1% to $3,371/FEU, while the Shanghai-New York and Rotterdam-New York routes both remained stable at $4,382/FEU and $2,210/FEU, respectively.

Post time: May-10-2024
  • Previous:
  • Next: