Transpacific spot rates hit $10,000 as Asia-Europe slides

Spot freight rates on the major east-west trade lanes are moving in opposite directions for a seventh consecutive week. According to Drewry's World Container Index, the rate from Shanghai to New York has breached $10,000 per 40ft container for the first time since the latter days of the Covid pandemic.

This week's assessment put the Shanghai-New York rate at $10,394, a 7% weekly increase. The Shanghai-Los Angeles leg also rose, climbing 5% to $7,712 per 40ft. US freight forwarder Freight Right reports that carrier pricing power remains stronger to the US East Coast, with some shippers paying nearly $1,000 above current index levels to secure space.

Capacity constraints drive pricing

Freight Right states that both US coasts are experiencing constrained capacity and increasingly unstable vessel schedules. The operational concern is shifting from pure price to reliability. "Vessel schedules have become increasingly unreliable," the forwarder said. A shipment can secure space and still see its scheduled departure pushed back several days. Combined with booking rollovers, total delays can approach two weeks.

The capacity crunch is set to continue. Drewry's Container Capacity Insight shows nine transpacific blank sailings announced for next week, up from eight this week. Drewry expects rates to rise slightly next week amid impending pre-Golden Week demand and continued capacity management by carriers.

Asia-Europe rates accelerate decline

In stark contrast, spot rates from Asia to Europe are falling rapidly. The Shanghai-Rotterdam rate declined 9% this week to $3,626 per 40ft. The Shanghai-Genoa leg fell 5% to $4,016 per 40ft.

The current pricing weakness is dramatic compared to 2022. When Asia-US East Coast rates were last at today's levels, Asia-North Europe stood at around $9,000 per 40ft and Asia-Mediterranean was at $11,000.

Despite the slide, analysts at Linerlytica describe current Asia-Europe pricing as resilient. Today's spot rates are still around double what they were this time last year. They attribute this resilience to stronger-than-expected demand after a May peak and severe port congestion in China over the last two months.

Congestion shifts to Southeast Asia

While congestion in Chinese ports is starting to clear from early September peaks, the problem has shifted. Linerlytica notes that congestion has moved to Southeast Asian ports. Waiting times in Singapore have risen to over four days due to vessel bunching.

Drewry records four Asia-Europe blank sailings scheduled for next week, up from one this week, indicating tighter capacity. However, the analyst expects Asia-Europe rates to decline slightly next week, as demand remains weak.

A further factor affecting the Europe trade is the increasing number of carriers returning to Red Sea routings. The shorter sailing distances effectively inject additional capacity into the market.