Due to seasonal growth in import demand and labor-related supply chain disruptions, airlines mainly through the cancellation of flights to manage capacity, resulting in container spot freight rates from Asia to the U.S. West Coast last week continued to rise, spot freight rates since June Since about 50%.
Seasonal demand for commodities, draft restrictions on the Panama Canal, cargo handling disruptions during recent labor contract negotiations in Vancouver and Prince Rupert, and, most importantly, empty ships, have all pushed up the spot exchange rate. According to Platts data, freight rates on the west coast of Asia in the past week were US $1,950 per FEU, the highest level since October last year.
In July of this year, airlines shut down nearly 20 percent of total capacity to North America's east and west coasts, according to a report Analysis by Sea-Intelligence Maritime. That was the highest level since February-April, when imports hit year-to-date lows.
Retailers and freight forwarders are bracing for another general tariff increase (GRI) on eastbound trans-Pacific routes this week, and despite last month's airport capacity increase, the rally that began in June is likely to remain short-lived.
Farrow Cargo Chief Commercial Officer David Bennett David Bennett said that this spring, when imports were weak, the carrier provided the container space that customers needed, even if the number exceeded the customer's weekly quota. However, from about two or three weeks ago, the operator began to enforce the allocation restrictions included in the service contract. Any goods that exceed the allocation are either transferred to subsequent voyages, or the customer must pay the spot rate, or in the case of freight forwarders, various freight (FAK) rates higher than the service contract rate.
Bennett added that the operator will also apply for an increase of $1000 per FEU this week, and the spot rate will become quite high. A good sign that carriers are confident that another GRI will be implemented is that they strictly require customers to comply with cargo distribution limits. The stowage limit for a shipper or freight forwarder is the total of its annual Minimum Quantity Commitments (MQC) divided by 52.
airlines, freight forwarders and industry analysts say that after almost two consecutive years of record or near-record imports from late 2020 to mid -2022, followed by double-digit declines in trans-Pacific imports late last year and early this year, the trans-Pacific region is now returning to the normal seasonal ups and downs of the pre-pandemic years. This means that imports will peak in August-October and fall in November and December, which will limit the spot rate.
the influx of large new container ships (mainly for Asia-Europe trade) will have a knock-on effect, as smaller vessels serving Asia-Europe trade will shift to trans-Pacific and other trade routes. That's why freight forwarders and industry analysts expect the recent rise in the spot rate, which is expected to start in November lower, could be the last for some time.
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