Spot freight rates on the trans-Pacific dropped this week after last week’s brief rebound off their 22-month lows.
The Drewry benchmark rate for container shipments from Hong Kong to Los Angeles fell off by 1.4 percent this week to $1,521 per FEU this week from $1,543 per 40-foot equivalent unit last week.
Last week’s rebound may have been caused by a temporary tightening of capacity following the week-long Golden Week holiday in China at the beginning of October when carriers skipped some port calls.
Spot freight rates on the trans-Pacific and Asia-Europe trade lanes have been sliding for more than a year. That's because of the huge amount of big new ships that carriers have deployed on the Asia-Europe trade lanes and the resulting cascading of smaller, less-efficient vessels onto the trans-Pacific.
The Drewry benchmark this week was higher than its 22-month low of $1,478 per FEU, but is still 30.2 percent lower than the $2,179 per FEU in the same week last year.
Carriers started cut capacity on the two trade lanes in the spring and summer by a total of 606,950 TEUs, according to Drewry, but the cuts were not deep enough to sustain rates. Of this total, 18 services with capacity of 445,100 TEUs were cut from the trans-Pacific, and five services with 161,500 TEUs of capacity was cut from the Asia-Europe and Asia-Mediterranean lanes.
Despite the cuts, global container freight rates fell for the fourth straight month in September and are down 35 percent in the last 12 months, Drewry said.