Shipping lines’ unlikely to hike prices further in 2018
The Chinese New Year did not augur well for container spot rates from Asia to the rest of the world as the impact of reduced load factors due to closure of Chinese factories made itself felt.
The Shanghai Containerized Freight Index fell almost 10%. Spot rates to northern Europe and Mediterranean ports declined despite carriers trying to hold on to existing prices.
Transpacific spot rates plunged marginally more at 11% and US East coast a little more at 12%.
And on the back of rising fuel costs, carriers will need to build the same into new contract rates.
Meanwhile, European exporters to Asia and the Middle East are becoming increasingly concerned about the knock-on effect of the number of blanked headhaul sailings around the new year period, which will result in cancelled eastbound voyages in April.
Following last year’s Chinese New Year, carriers had cancelled a significant number of backhaul sailings, resulting in a substantial backlog of containers to be shipped, causing severe supply chain delays and a big spike in rates. Although prices eventually fell back, carriers successfully held onto many of their gains, with rates still some 15% higher than a year ago.
But one major factor in the price disruptions last year was the restructuring of the alliances which are not expected to have the same effect on rates in 2018.