Spot rates for container shipments from Hong Kong to Los Angeles fell below $1,500 per 40-foot-equivalent unit for the first time since January 2010, according to Drewry Shipping Consultants’ weekly benchmark.
Drewry’s index dipped to $1,486 per FEU this week from its $1,521 level of the last two weeks. The latest reading was the lowest since Jan. 11, 2010, when the index stood at $1,416 per FEU. The container benchmark gauges rates paid by shippers to non-vessel-operating common carriers, excluding terminal handling charges in Hong Kong.
Since late August, the spot index has plummeted 20 percent. It is 29.9 percent below this year’s $2,119 peak in early January and 35.4 percent below its level of a year ago.
Trans-Pacific carriers have been struggling to maintain rate levels in the face of rising capacity. Alphaliner predicts trans-Pacific carriers’ losses this year could hit $300 million, an estimate many consider conservative.
With rates sliding, carriers have begun to withdraw services and accelerate scheduled winter layups of vessels. Most trans-Pacific capacity moves under annual contracts but carriers and cargo interests say spot rates have become more prominent on the route since early last year, when many shippers turned to NVOs during a capacity squeeze.