An Aug. 1 general rate increase and high peak-season volumes heading to the U.S. pushed spot rates from Asia to the U.S. to their highest levels this year.
Drewry’s benchmark rate for container traffic heading from Hong Kong to Los Angeles rose 20.8 percent this week, to $2,175 per 20-foot container. The jump came on the back of an Aug. 1 general rate increase by members of the Transpacific Stabilization Agreement, which recommended a $600 per container rate increase. So far, spot rates have risen by $375, more than half of what carriers were seeking from customers.
“The rise in the benchmark has been supported by strong peak-season volumes on the eastbound trans-Pacific trade, but how long these gains will last will depend largely on carriers’ pricing discipline and the outcome of the ILWU contract negotiations,” Drewry said.
While the GRI has only netted 62.5 percent of its intended $600 per container, the latest benchmark increase is the highest dollar-value jump in the spot rate in 13 months as well. It’s the first time the rate has topped $2,100 since August 2013. It is also the first time the rate has shown year-over-year growth in at least 53 weeks.
Container carriers in the trans-Pacific lane have had a hard time obtaining — and subsequently keeping — rate hikes this year, despite volumes rising 4.1 percent year-over-year in the first half at U.S. West Coast ports. Spot market increases around most general rate increases have been no more than half the desired increases, and the spot rates have dropped back in the following two weeks. The Aug. 1 GRI was the largest sought in 2014.
The Shanghai Containerized Freight Index, which prices for the week ahead, jumped 24.5 percent to $2,198 per FEU last week, surpassing the $2,000 mark for the first time since February, to reach its highest level since April 2013.