The Drewry Hong Kong-Los Angeles container rate benchmark, soared by 17.5% to US$2,452 per 40ft container this week.
Last week’s Drewry transpacific price benchmark dated 1st August increased by just $71 per 40ft container from levels in the previous week, but it has now become clear that the rate increase was deferred by most carriers.
“We said last week that one factor in the price changes was that carriers are staggering the implementation of this month’s GRI [General Rate Increase],” explained Martin Dixon, Drewry’s research manager for freight rate benchmarking. “What we now know is that the spot market has accepted the $500 rate increase over a period of 2 weeks, not one.”
The latest $500 price increase ($429 this week and $71 last week) propelled spot freight rates from Hong Kong to Los Angeles to their highest level this year. This week’s $2,452 rate is 89% higher than this time last year.
Perhaps more importantly, this was the 5th week-on-week rate increase of more than 10% this year.
With transpacific capacity lower than a year ago and Asia-to-US volumes in July up by approximately 7%, the container market on the transpacific route appears to be much tighter than the Asia-Europe container trade.
“The jump in rates and in volumes are there, but we have not changed our belief that freight rate levels will drift back downwards through the latter part of August,” Dixon warned. “We tell shippers to expect that spot rates have now reached a plateau and will now decline.”
“Drewry Container Freight Rate Insight” is published by Drewry Maritime Research. Click here to learn more.