Although spot freight rates on the Asia-Europe and trans-Pacific trade lanes have risen dramatically as a result of the general rate increases implemented by carriers in March, rates will come under increasing pressure in the second quarter, according to Drewry Supply Chain Advisors.
The London-based consulting firm said in a bulletin Friday that vessel capacity on the two east-west trade lanes will start climbing again during the second quarter as more big new vessels are delivered and services suspended for the slack winter season are reintroduced.
“Added to which is the danger that carriers are encouraged by higher paying freight rates to return more idled tonnage to service,” it said.
Many carriers have announced another round of rate increases in April and May, but Drewry questioned whether these increases will be sustainable in light of the additional capacity entering the market.
Drewry said it believes freight rates will soften through the second half of the year as surplus capacity weighs on rates. It said shippers entering negotiations for eastbound trans-Pacific cargo contracts should expect to end up paying similar rate levels to a year ago, subject to variations in bunker surcharges.