Average spot rates on the eastbound trans-Pacific trade lane eased 5.2 percent from last week’s record high, which followed the general rate increase recommended by the Transpacific Stabilization Agreement implemented by carriers during the first two weeks of August.
The Drewry Hong Kong-Los Angeles container spot rate benchmark dropped to $2,730 per 40-foot-equivalent container unit, down $150 per FEU from last week’s record of $2,880 per FEU.
“We have said for some time that carriers’ continued attempts to raise container freight rates in the trans-Pacific and Asia-Europe trades will become more and more difficult, and be reversed by subsequent rate decreases, due to the weak supply and demand balance,” said Philip Damas, division director of Drewry Supply Chain Advisors. “The latest development of Drewry’s Hong Kong-Los Angeles container rate benchmark illustrates this.”
Despite the drop, this week’s benchmark still held on to $278 of the $500 per FEU general rate increase recommended by the TSA. The net increase in the benchmark has been only $30 per FEU, however, because carriers implemented the $450 per FEU peak-season surcharge on June 10, pushing the benchmark rate up to $2,700 per FEU.
The general rate increase implemented by TSA carriers in the first two weeks of August was even higher than the four previous increases this year, which ranged from $300 to $400 per FEU, and comes as the import trade from Asia enters the peak shipping season.
The Drewry benchmark spot rate is now 54.6 percent higher than the same week last year, when it averaged $1,853 per FEU. It has climbed 90 percent in the 33 weeks since the end of last year, when it averaged $1,436 per FEU.