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The unrelenting decline in container freight rates from Asia, caused by a collapse in demand, is compelling ocean carriers to blank more sailings than ever before as vessel utilization hits new lows.
Drewry’s WCI Asia-North Europe component slumped a further 18% this week, to $2,192 per 40ft,
and is down 75% since August. Rates from China to North European hub ports now being touted by forwarders sank below the watershed $1,500 per 40ft benchmark.
“What worries me is that if we pass on to our client a very low rate, he will do his sums based on those freight costs, and then suddenly the market pivots again and the carrier lumps-on some hefty GRIs or other surcharges,” said the forwarder.
Another UK-based forwarder is concerned about future instability in the liner industry if the market does not normalize at sustainable levels. “We really wanted to see lower rates that are sustainable, but I fear the complete opposite is about to happen; too-low rates will not be sustainable and force a weaker liner to go ‘pop’,” he said.
Read more in an article from The Loadstar.