Spot freight rates on the Asia-U.S. trades held their ground this week, rising slightly and ensuring most of the sharp gains made on the Jan. 1 rate increase were retained through the end of January. The Shanghai-U.S. East Coast spot rate rose 2 percent to $2,466 per 40-foot container, while on the trans-Pacific the rate was up by 1 percent to $1,388 per FEU, according to the latest reading of the Shanghai Containerized Freight Index.
Rates to the East Coast may have held up better than the trans-Pacific during January, which was down just 3.4 percent on the price in the first week of January (the trans-Pacific was down 8.5 percent), but the year-over-year comparisons were not as favorable. The Asia-U.S. East Coast spot rate is almost half what it was during the same week in 2015 and you need to go back to April last year to find a positive comparison. On April 30 the rate was $3,605 per FEU. The Asia-U.S. West Coast is 30 percent down on the same week last year.
Surplus capacity has undermined all efforts to push through rate increases, with rate averages at their lowest levels since 2009. A pre-Chinese New Year demand surge has failed to materialize this year, and with the demand forecast to weaken significantly in the post-Lunar New Year period in February, rates are expected to decline further with little chance of any significant recovery until the second quarter, according to trade analysts. Stay tuned for more spot rate updates.