The Drewry Container Rate Benchmark for shipping containers from China to the U.S. West Coast jumped 21.5 percent in the week ended Aug. 15, as carrier members of the Transpacific Stabilization Agreement implemented long-postponed peak season surcharges.
The benchmark for the average spot price for shipping a 40-foot-equivalent container unit from Hong Kong to Los Angeles rose to $1,853 per FEU from $1,525 in the previous week following several weeks of flat or sagging rates on major east-west shipping lanes.
The TSA originally published a voluntary guideline calling for a peak-season surcharge of $400 per FEU that was supposed to run from June 15 through Nov. 30, but postponed implementation for at least a month.
By the Numbers: Container Rate Benchmark
After what turned out to be a two-month delay, the TSA announced the new Aug. 15 implementation date on Aug. 3, saying its members are seeing “positive indications of a peak season on the horizon, as retailers begin restocking shelves for the back-to-school and holiday seasons and as businesses resume global sourcing of materials and components.”
Despite the hefty increase on Aug. 15, the benchmark rate was still 32.3 percent lower than the $2,737 per FEU rate in the same week last year, when trans-Pacific vessel capacity was in short supply and demand was strong. The rate is also 12.6 percent below the $2,119 per FEU high for 2011 in early January.
The delivery of new container ships this year and relatively weak increases in demand for shipping space has eroded rates on the trans-Pacific and the Asia-Europe trade, which in turn caused losses to many of the leading container lines in the first half of the year.
This week’s increase was the first significant increase in trans-Pacific spot rates this year since the 8.9 percent increase to $1,953 per FEU in the week ended May 1, when some contract rates kicked in under annual contracts and average spot rates followed suit.
Drewry bases its trans-Pacific benchmark on an average of spot rates from non-vessel-operating common carriers in Hong Kong each week.Eastbound spot freight rates only apply to about 10 percent of trans-Pacific container volume, since most cargo is priced at a rate set under the annual contracts.