After two months of relative stability, the spot rate for shipping a 40-foot container from Hong Kong to Los Angeles climbed 6 percent to almost $2,000 per FEU in the week ended April 19 as the scarcity of capacity on vessels coming out of Chinese ports fueled a run-up in bids for slots.
The spot rate for shipping an FEU on that trade lane hit $1,976, compared to $1,864 in the week ended April 12, according to price data provided to Drewry Shipping Consultants by non-vessel-operating common carriers in Hong Kong. The rate is 73.7 percent higher than the rate of $1,138 that prevailed in the same week a year ago.
The resumption in the upward movement in spot freight rates after the two-month lull that followed the run-up before the Lunar New Year on Feb. 14, is being caused by the lower capacity levels that carriers are maintaining on the trans-Pacific at a time when U.S. retailers are restocking their inventories and consumer spending is increasing.
“The trend in capacity is still down,” said Philip Damas, division director of Drewry Supply Chain Advisors in London. According to Drewry’s data, deployed vessel capacity on the trans-Pacific in March was 8 percent below levels a year earlier. “They are still maintaining very tight capacity and are unwilling to deploy more vessels until they make money,” said Damas.
He said Drewry has been contacted by trans-Pacific importers who are “still very concerned about their ability to move product as they want.” Damas said tight capacity will continue to be an issue at least into the peak season on the trade lane.
The last big increase in Drewry’s container rate benchmark occurred in the fifth week of 2010 starting Feb. 1, when the spot rate jumped to $2,012 per FEU, an increase of 41 percent from the previous week. The rate stayed at that level for three weeks before drifting downward below $2,000 per FEU.
The spot rate for shipping an FEU on that trade lane hit $1,976, compared to $1,864 in the week ended April 12, according to price data provided to Drewry Shipping Consultants by non-vessel-operating common carriers in Hong Kong. The rate is 73.7 percent higher than the rate of $1,138 that prevailed in the same week a year ago.
The resumption in the upward movement in spot freight rates after the two-month lull that followed the run-up before the Lunar New Year on Feb. 14, is being caused by the lower capacity levels that carriers are maintaining on the trans-Pacific at a time when U.S. retailers are restocking their inventories and consumer spending is increasing.
“The trend in capacity is still down,” said Philip Damas, division director of Drewry Supply Chain Advisors in London. According to Drewry’s data, deployed vessel capacity on the trans-Pacific in March was 8 percent below levels a year earlier. “They are still maintaining very tight capacity and are unwilling to deploy more vessels until they make money,” said Damas.
He said Drewry has been contacted by trans-Pacific importers who are “still very concerned about their ability to move product as they want.” Damas said tight capacity will continue to be an issue at least into the peak season on the trade lane.
The last big increase in Drewry’s container rate benchmark occurred in the fifth week of 2010 starting Feb. 1, when the spot rate jumped to $2,012 per FEU, an increase of 41 percent from the previous week. The rate stayed at that level for three weeks before drifting downward below $2,000 per FEU.