Trans-Pacific eastbound spot rates held on to their gains of last week in an indication that the partial success of the $600 per 40-foot container rate increase to West Coast ports implemented on Jan. 15 may have staying power.
The weekly Drewry Hong Kong-Los Angeles spot rate index stood at $2,524 per FEU this week, unchanged from last week and $311 per container higher than the level of two weeks ago. There should be caution in attributing too much to a steady level following a GRI as increases in 2012 were sometimes followed by the same rate the following week only to decline in subsequent weeks.
Although the $600 Jan. 15 general rate increase was only half achieved, carriers are not displeased; several said off the record this week that eastbound trans-Pacific rates remain significantly higher than they were a year ago — 38 percent in the case of the Drewry index — and they are optimistic the heavy losses experienced in the first quarter of 2012 won’t be repeated in the first quarter of this year.
The $311 mid-January increase was important from the carriers’ perspective as it puts them in a better position to achieve higher annual contract rates from shippers when most contracts are renewed on May 1 although that date is still some distance away. In an effort to reinforce this potentially advantageous position headed into service contract negotiations, trans-Pacific carriers are planning another general rate increase, possibly in mid-March.