Ocean rates are still on a downward trajectory although the sharp decline from last week has levelled out as the February 17 start of the Chinese New Year approaches.
According to Gavin van Marle, managing editor of The Loadstar, Asia rotations connecting Europe, North Europe, the Mediterranean, and both coasts of the US decreased by 5%, 6%, 4% and 7% respectively.
Speaking on a weekly podcast hosted by the supply chain title, he said: “The pre-Chinese New Year rush is over. Freight forwarders in Europe are readying for steeper declines once the actual holidays themselves are over.”
Van Marle said the World Container Index (WCI) had the latest spot rate per forty-foot container (FEU) at $2 379.
“Most of my contacts expect that to dip below the $2 000 mark in the second half of February.”
Trans-Pacific demand is so low, he said, that one forwarder referred to volumes as “breadcrumbs”.
Worst-case scenario at this stage is that FEU spot rates could fall to $1 600.
“There's a lot of discounting going on and I think capacity is starting to be curtailed. Once the Chinese New Year is over, you're looking at the perfect conditions for a rate war to break out.”
