Eastbound spot rates on the trans-Pacific opened the New Year with a hefty jump as shipping lines put peak season surcharges into effect until the Chinese New Year.
The Drewry container rate benchmark for shipping a 40-foot equivalent container unit from Hong Kong to Los Angeles rose 10.1 percent to $2,119 in the week ended Jan. 3, compared to $1,925 per FEU the week before.
By The Numbers: Container Rate Benchmark.
"Nearly all the carriers have implemented peak season surcharges of about $200 per 40-foot container. Their aim is to set the climate to stop the erosion of rates before they start their annual contract negotiations," said Philip Damas, division director of Drewry Supply Chain Advisors in London.
"The rate increases are likely to hold at least until the Chinese New Year, but after that it's difficult to say," he said. "I'm skeptical whether the market can sustain significant rate increases this year."
The increase in spot rates comes as shippers in Asia are pushing back against rising shipping costs. The Hong Kong Shippers Council said this week it would ask regulators in Beijing to look at the growing lineup of surcharges in the region it says do not reflect true business costs for the carriers.
At the same time, several carriers and industry analysts have expressed concern this week that the supply of new vessels scheduled for delivery this year could upset the balance between supply and demand for vessel space. NYK Line President Yasumi Kudo warned in his New Year message that the supply of container ship capacity will outstrip the growth in demand for vessel space this year and next as more new container ships are delivered in the two-year period.
Damas, too, thinks the new vessel deliveries hanging over the market vessel capacity will affect rates. Still, he thinks spot rates on the eastbound trans-Pacific will probably be about the same as in 2010 on the whole but only excluding the "abysmally" low rates in the first few weeks of last year, which dragged down the average.
For example, the Drewry benchmark rate of $2,119 per FEU as of Jan. 3 this year, is 65 percent higher than the benchmark of $1,284 per FEU in the same week at the beginning of last year, when the rate was 13.9 percent lower than in the same week of 2008.
Drewry is forecasting that eastbound volumes on the trans-Pacific will increase 6.1 percent in 2011, compared to an increase of 17 percent in 2009. This is lower than its forecast for the growth of global volume, which it expects to increase 7.3 percent overall, driven by the growth of the north-south and intra-Asia trades.
-- Contact Peter T. Leach at email@example.com.