Beijing December 20 2021: All-inclusive trans-Pacific container shipping rates to North America were buoyed in the week to Dec. 17 by a renewed push to restock retail inventories in the period between the calendar year-end and Asia’s Lunar New Year celebrations beginning Feb. 1, which will curb factory and transport operations.
The acceptance of premium service fees in additional to ocean freight rates was not as widespread among shippers as it was during the August-September peak season approach to the holiday shopping season. Some shippers were shopping around the market for the best rates or deferring cargoes until after Lunar New Year where possible, sources said.
But demand has increased from a lull in October-November and Asian export hubs are facing a growing shortage of empty equipment as the holiday import rush places more equipment out of position.
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“We extended out rates though December. There are however an increasing number of premium deals being cut presently,” a shipping line representative based in Europe said.
Premium rates from North Asia to the East Coast of North America were quoted as high as $21,000/FEU depending on load and discharge ports, but mostly remained in the $16,000-$18,000/FEU range this week.
All-inclusive rates including premium surcharges from North Asia to the West Coast of North America climbed to $13,000-$15,000/FEU on average, up around $1,000/FEU on either end of the range from last week. Premium rates for inland point intermodal bookings via Los Angeles/Long Beach to Chicago were at the $17,000/FEU level and above.
“I think we are about to see things get worse unfortunately and from early indications might hit close to the peak we saw in September,” a US-based freight forwarder said.
Premium rates from Southeast Asia rise
Premium rates for Southeast Asia-to-North America cargoes increased this week as carriers levied General Rate Increases amid expectations of higher demand, sources said.
“Rates have gone up by $1,000-$1,500/FEU for shipments to the US West Coast and $500-$1,000/FEU for the US East Coast,” a Singapore-based source said. “The increases come on the top of the FAK rates which continue to be stable.”
A source in China quoted the surge at $500/FEU to the US West Coast and $1,000/FEU to the East Coast, confirming that premium rates rose while FAK rates were unchanged.
All-inclusive rates on trade lanes from Southeast Asia were heard at $17,000-$19,000/FEU and $15,000-$17,000/FEU to the East Coast and West Coast of North America, respectively.
“Every price is valid in the current market. There is no one rate,” an India-based source said. “It all depends on the kind of deal you are able to strike.”
Another source in India said demand has slowed down but equipment shortages persist.
“I recently booked two containers for Australia at an all-inclusive rate of $5,400/TEU. This is lower than around $5,700/TEU nearly a month back,” the source said.
But growing queues at transshipment ports may put upward pressure on rates, sources said.
Container volumes at Singapore port were recorded at 3.15 million TEUs in November, up 0.5% from the same month last year, according to the Maritime and Port Authority of Singapore. Throughput was nearly 6% higher month-on-month, the data showed.
Shipping lines hike rates to Europe
Container rates from Asia to Europe saw some upside over the course of the week as mid-month GRIs came into force alongside firmer demand as shippers front-load ahead of Lunar New Year in February, which is arriving earlier than in previous years.
Platts Container Rate 1 – North Asia to North Continent – rose $1,000/FEU on the week to $15,500/FEU on the back of the GRIs, while PCR3 – North Asia to Mediterranean – rose $750 to $14,750/FEU on Dec. 17.
“Good luck to Santa Claus – he won’t be able to deliver that many goods this year owing to the logistical constraints – to be honest it might actually be better for some of us to ship our goods by reindeer,” a carrier source said.
