Ocean carriers could be forced to mothball more eastbound transpacific U.S. west coast loops, and the vessels that operate them, to stop the extraordinary haemorrhaging of container spot rates, which have halved in value in the past four weeks.
According to Friday’s reading of the China-U.S. west coast component of the Freightos Baltic Index (FBX), the spot price for a 40ft plunged 20% this week, to $2,361, compared with a typical premium rate a year ago of $20,000, a two-thirds decline since May.
Ships are reported to be leaving Asia for the U.S. west coast barely three-quarters full, despite aggressive blanking by carriers, and spot rates are on track to fall through the $2,000 watershed next week.
And unless carriers take radical action to take out more capacity on the route, rates could dip below pre-pandemic levels before the start of the contract season, which will severely hobble the lines’ negotiating position.
Moreover, in the interim, BCOs sitting on contracts some four times higher than the spot market are said to be receiving ‘temporary’ rate reductions from carriers to keep their loyalty.
Read more in an article from The Loadstar.