Drewry’s Hong Kong-Los Angeles Container Rate Benchmark dropped for a third-consecutive week to $2,121 per 40-foot container. This is the lowest rate since just over a year ago in early April 2012.
The benchmark rate for the week of April 24 fell 5 percent or $112 from the week before, according to the latest release of the Drewry Hong Kong-Los Angeles Container Rate Benchmark. This rate is down 9.3 percent year-over-year. In the past three weeks, the benchmark dropped 15.2 percent or $379. The current rate is now down 4.2 percent or $93 from the beginning of 2013.
The inability of carriers to hold onto rate increases, shown most recently by the fact that all gains have already been lost from the April 1st general rate increase, has not stopped talks of more increases. Trans-Pacific carriers Cosco, U.S. Lines and MOL plan to increase rates on May 1 for all cargo moving from the Far East to the U.S. West Coast by $800 per 40-foot container.
“We held a view that container liners could not generate return better than costs of capital in 2013 but recent development suggests breakeven could also be a challenge,” Jefferies shipping analyst Johnson Leung said. “Sentiment in trans-Pacific is weak in our view as shown by the sliding spot rates in trans-Pacific over the past few weeks.”
Asia-West Coast rates extended their decline as well last week, according to the Shanghai Containerized Freight Index. The week ending April 19 saw trans-Pacific eastbound rates drop another 2.5 percent or $85 per FEU.