The week starting September 15 has seen a dramatic collapse of SCFI spot rates for the east-west Pacific trade lane, according to Lars Jensen, Founder and CEO of Vespucci Maritime.
Rates from Shanghai to the US West Coast dropped by US$734 per forty-foot equivalent unit while the rate to the US East Coast fell by US$750 compared to last week.
This is a sharp decline of 31% to the West Coast and 23% to the East Coast – effectively wiping out the gains seen in recent weeks, Jensen pointed out.
The ongoing trade war continues to put a strong dampener on demand, he added. “With Golden Week in China less than two weeks away, this is indeed a weak position to enter into the slack season.”
As a result, carriers are expected to respond urgently by announcing further blank sailings and potentially some full seasonal service cancellations as they seek to manage capacity amid this downturn, according to Jensen.
Rates to Europe also continued to decline, falling by US$100 per twenty-foot equivalent unit this week. The Shanghai to Red Sea and Persian Gulf route experienced a significant drop of US$282 per unit compared to last week.
“These considerable rate adjustments reflect multiple forces, including geopolitical tensions and seasonal market swings. Shippers and carriers alike must brace for volatility as the market digests ongoing uncertainties in global trade,” Jensen said.
