Average spot rates on a key trans-Pacific container route posted their third consecutive weekly decline and are 37.2 percent below their peak last August, Drewry Shipping Consultants reported.
Drewry’s weekly container benchmark showed non-vessel-operating common carriers reported paying spot rates averaging $1,781 per 40-foot-equivalent unit from Hong Kong to Los Angeles during the week ending Feb. 28. The index is 3.5 percent below the previous week’s $1,846 level and down 4.4 percent from a year ago.
The index, published in The Journal of Commerce, hit a 53-week low and has dropped 14.4 percent since Jan. 31, before Chinese factories closed for the Lunar New Year.
By The Numbers: Container Rate Benchmark
The latest week’s index marked the third consecutive week-to-week and year-to-year declines. Until Feb. 14, the Drewry trans-Pacific spot index had not shown a year-to-year drop since January 2010, when it turned upward after more than a year of decline during the recession.
The dip in spot rates comes as shippers and carriers are beginning negotiations for annual service contracts that account for more than 90 percent of trans-Pacific volume. Most of those contracts expire at the end of April.
The Transpacific Stabilization Agreement, representing most eastbound carriers, said last month it expects Asia-to-U.S. volume to rise 7 to 8 percent this year, close to a forecast 8.8 percent rise in capacity. PIERS, a Journal of Commerce sister company, predicts eastbound trans-Pacific demand growth of 8.2 percent.
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