As CNY and slack season approach, the ocean price-cutting begins
Transpacific spot rates declined for the first time in a month this week, as the threat of a US east and Gulf port strike vanished and the opportunity for pre-Chinese New Year (CNY) front-loading ended.
Meanwhile, significant price discounting continued to be seen on the Asia-Europe trades, with little hope of any recovery before CNY begins on 29 January.
According to Drewry’s latest World Container Index, spot rates on the Shanghai-Los Angeles leg dropped 5% week on week, to $5,228 per 40ft, while the Shanghai-New York leg declined 4% week on week, to $6,825 per 40ft, indicating that a series of general rate increases implemented on 15 January on the transpacific eastbound trade, ranging from $3,000 to $1,000 per 40ft, have yet to make an impact.
The WCI spot rates on both trades remain 35% and 21% up year on year, respectively.
Meanwhile, the recent rate weakness on Asia-North Europe and Asia-Mediterranean continued for another week, with the Shanghai-Rotterdam losing 3%, to finish on $4,231 per 40ft, a level 15% lower year on year.
The WCI’s Shanghai-Genoa leg declined 2% week on week, to $5,086 per 40ft, and is now 19% lower year on year, and forwarders on the trade now believe falling prices are likely to continue into February.
“We have seen a significant decrease in rate levels on FEWB of approximately $2,000 per 40ft from the levels we saw in December, and our expectation is that they will continue to drop post CNY,” one European forwarder told.
Xeneta head analyst Peter Sand told the market was also becoming more nuanced.
“Xeneta’s market average is at $4,488 per 40ft today – down a good $600 from year-end, and the declining trend set to continue; at the lower end of the market, we have rates at $2,777 per 40ft.
However, he also noted: “Especially during times like this, with substantial volatility, you can’t claim ‘the market is down by $2k in general’. But you can slice the market insights in a way that tells you ‘someone is out to catch you with some low rates on offer’.
“It’s clear that there are a number of lower offerings around – as the sub-average market is down by 20%-25% since the end of 2024, compared with market average spot freight rates that are down 12%.”
He said the major factors behind this were the alliance reshuffles, the Gaza ceasefire agreement, and rising overcapacity as a function of lower-than-expected demand.
“Can carriers correct this? November and December were extraordinary for Far East to North Europe and Med as the spot market rose,” said Mr Sand.
“We enter a weaker period of the year, a decline is happening – although still substantially above the end-October rates – but even a swift raft of blank sailings cannot turn the tide.”
The transatlantic continued to buck the east-west rate trend, however – with a transit time of one week between North Europe and North America there were still options for shippers to beat the Trump inauguration (Monday) deadline, when new tariffs could theoretically be announced.
The WCI’s Rotterdam-New York leg gained 4% week on week to $2,798 per 40ft, a rate that is 86% up year on year.
