As the Chinese New Year holidays approach, sea freight costs from the Far East are dropping
The last week has seen a sharp drop in container freight rates, affecting the main routes to varying degrees, including the one from China to Italy.
Rates fell by 11%
On average, the latest Drewry Container Index report shows, rates fell by 11% to $3,445 for shipping a 40-foot box. The sharpest drop was observed on the Shanghai – Rotterdam route (-19%, to $3,434), followed by shipments from the Chinese port to Genoa (-10%, $4,562).
From Shanghai to US ports
The costs for shipments from Shanghai to US ports also fell sharply. In particular, on the route to Los Angeles the reduction was 8% (to $4,813), while towards New York the decrease was 7% (to $6,377). Only slight drops were recorded on transatlantic routes, where rates dropped by 1% in the last 7 days ($2,778 for Rotterdam – New York, $821 for the reverse route).
Arrival of Donald Trump
The general decline observed by Drewry is most likely influenced by the approach of the Chinese New Year, which this year will begin on January 29 and last for about two weeks, and perhaps also by the end of the frontloading phenomenon (the anticipation of shipment departures, on this occasion to prevent the introduction of possible new duties) with the arrival of Donald Trump.
Red Sea routes
While Drewry says he still expects slight declines for next week due to the Chinese holiday, making longer-term forecasts is problematic to say the least. Container shipping is in fact on the threshold of many – possible or certain – changes in scenario, from the entry into operation of container alliances to the return of transits in the Suez Canal, with the possible repercussions in terms of excess displaced hold.
Regarding the reinstatement of the Red Sea routes, on which, as seen, companies are still very cautious, Xeneta has envisaged a very gradual transition in a report.
Alliances between carriers
Although the alliances between carriers in their programming in force from next February have in fact foreseen a double scenario (with ships passing off the Cape of Good Hope or ships transiting through Suez), the return to the second solution according to analysts will begin with the sending of ships with less than 10 thousand TEU capacity to the Red Sea, followed only later by the deployment of units with 18-24 thousand TEU on the route.
The return to normality, once started, will therefore require at least 1-2 months, and will most likely be accompanied by “severe critical issues”, in particular the arrival of ships in the destination ports much later or much earlier than expected.
