Container freight suddenly skyrocketed, Asia-Europe route freight significantly increased, the market wind to change?
Last week, container rates on mainstream east-west routes rebounded slightly after 15 consecutive weeks of declines. Due to the implementation of the general freight rate increase (GRI) on the Asian outbound route, container freight rates have temporarily stopped falling and recovered.
According to Drewry's World Container Index, spot rates on the Shanghai-Rotterdam route rose 8 percent from the previous week to $3,396 per 40 feet, while Shanghai-Genoa rose 11 percent to $3,648 per 40 feet. A number of shipping lines, notably MSC, informed customers as early as October that general freight rates from Asia to Northern Europe would be raised to $5,000 per 40ft starting Nov. 1.
However, European freight forwarders pointed out that the GRI increase is more like "to prevent freight rates from falling further after the Golden Week." "Customer feedback is that inventories are adequate and demand will remain subdued for the next three months, so rates are likely to fall back after November," he said.
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Analysis data shows that in October, a total of 168 Asia-Europe routes, 21 voyages were canceled, making the original planned 1.88 million teu capacity reduced to 1.57 million teu, further tightening the market capacity.
In addition, there will be another round of attempted rate increases on November 15, with different carriers' price targets varying. For example, MSC has set the general freight rate for Asia to Northern Europe at $5,500/40ft, Hapag-Lloyd at $3,500/40ft, and CMA CGM wants to increase the rate for Asia to the Western Mediterranean to $5,700/40ft. Maersk also added a $500 high season surcharge on all Asia-Europe routes.
Peter Sander, principal analyst at Xeneta, said this rate increase was mainly a "strategic move" by shipping companies as they enter into contract negotiations with shippers for 2025. "European shippers may be concerned about spot rate increases in early November, but the underlying direction of the market is still down," he said.
Sander stressed that European shippers need to keep a close eye on market developments in November, as these attempted increases may not be sustainable and will directly affect long-term rates for next year's contracts.
In addition, spot rates for trans-Pacific and trans-Atlantic routes remained unchanged this week without significant fluctuations.
