Spot freight rates for shipping a 40-foot container across the Pacific during the last week fell to the lowest level in 23 months, reflecting the weakness of the peak shipping season and a glut of capacity.
The Drewry Container Rate Benchmark rate for container shipments from Hong Kong to Los Angeles fell 1.5 percent or $21 from the week before to $1,436 per 40-foot equivalent container unit. The latest rate is down 26.8 percent $1,961 per FEU in the same week last year and the lowest rate since Jan. 11, 2010, when the index stood at $1,416 per FEU.
The rate is down 22.5 percent since the $1,853 per FEU benchmark in the first week in August this year, when liner companies implemented a peak season surcharge that failed to take hold.
Spot freight rates on the trans-Pacific and Asia-Europe trade lanes have been sliding for more than a year because of the huge amount of big new ships that carriers have deployed on the Asia-Europe trade lanes. As a result most carriers reported losses for the first three quarters and predicted full-year losses.
Several smaller carriers have already gone out of business. Malaysian carrier MISC Berhad said last week it is withdrawing from the container shipping sector.
The Trans-Pacific Stabilization Agreement among 15 carriers on the eastbound trans-Pacific will try to implement an interim rate increase of $400 per FEU on Jan. 1 after the holiday season ends.