Asia’s Pre-CNY Spot Rates Surge: Reports of $10,000+

Container spot rates from Asia to the US and Europe continued to soar this week as a swift solution to the attacks on shipping in the Red Sea by Houthi rebels looks increasingly unlikely.

Moreover, reports suggest that some shippers of low-rated contract cargo are seeing their allocations slashed by up to 80% by their carriers, forcing them onto the spot market.

Xeneta’s XSI Asia-North Europe spot component jumped 25%, for an average of $4,612 per 40ft, representing a month-on-month increase of nearly 200%.

However, for shipments before the Chinese New Year, which commences on 10 February, some carriers are touting rates in excess of $10,000 per 40ft.

One UK-based NVOCC director had decided only to ship his most urgent boxes before CNY, on the basis that rates should go down in the traditionally slack period following the holiday.

“The lines have plenty of ships and demand is still not that strong, so once the longer transits get baked into their schedules, I can’t see any reason why rates would stay high,” he said.

Indeed, some carriers are putting on extra loaders, and there have been a several new containership charters by niche carriers that could take some of the heat out of the market.

These include German carrier Tailwind Shipping Lines, which provides a dedicated liner service for discount grocer Lidl, but also accepts third-party cargo. In fact, according to a report by Alphaliner, Tailwind “will expand its operated fleet with numerous charters of relatively small containerships”.

Meanwhile, Mediterranean shippers are not only facing huge delays in containers arriving from Asia, but are seeing the cost of spot freight rates leap to more than $6,500 per 40ft, from $2,300 at the end of December.

Elsewhere, transpacific spot rates from Asia to North America are “out of control”, according to a UK forwarder contact currently in Shanghai.

“The lines are charging what they like at the moment, whether that is to the west or east coast, the market has been taken over by a return of the pandemic ‘fear factor’ of not getting product shipped,” said the forwarder.

And transpacific carriers are still in the process of raising their rates, with further FAK (freight all kinds) hikes planned for 1 and 15 February.

Drewry’s WCI Asia to US west coast spot shot up 38% this week, to an average of $3,860 per 40ft, while its east coast spot climbed 35%, to $5,644 per 40ft, respectively 88% and 64% higher than for the same week of last year.

Vespucci Maritime’s Lars Jensen commented: “It would appear that the carriers’ ability and shippers’ de facto willingness to accept steep increases matches the behaviour we saw in the pandemic.”

But surprisingly, transatlantic spot rates were flat this week, with the XSI North Europe to US east coast spot stuck at a lowly $1,432 per 40ft.

However, according to contacts, there are “big increases in the pipeline” that will kick in next month.

“With the crazy rates the lines are getting elsewhere I can’t see that the carriers will accept the current transatlantic rates for much longer,” said a Liverpool-based forwarder contact.

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