The global freight sector is reeling from a plunge in transpacific spot rates, with the Far East to US West Coast trade lane recording a 39% drop since 1 June, says Xeneta in its latest report.
According to the think tank’s Weekly Ocean Container Shipping Market update, average spot rates on the route fell to $3 317 per 40 foot container (FEU) by 27 June as shippers push back against carriers’ peak season surcharges.
Xeneta chief analyst, Peter Sand, said the movement signalled a seismic shift in the US-China trade war’s aftermath.
“Average spot rates have plummeted from the Far East to the US West Coast, down 39% since 1 June, but it has not been so dramatic into the US East Coast, with rates holding up stronger, for now.
The US East Coast rate, at $5 990 per FEU, dipped 9% since 1 June but remains 43% higher than late May.
“The Transpacific into US West Coast is the key battleground for carriers when it comes to China exports, so spot rates have fallen harder and faster as they prioritised bringing capacity back on to this trade in the immediate aftermath of the lowering of 145% tariffs,” Sand explained.
Far East to North Europe and Mediterranean rates, which surged in early June, held firm at $2 852 and $4 440 per FEU respectively by 27 June, up 14% and 5% from 1 June. The North Europe to US East Coast trade, however, remained steady at $2 105 per FEU, a 3% rise since 31 May.
“Shippers are seeing how this game is playing out and are calling the carriers’ bluff by pushing back on the higher rates and peak season surcharges. It is only a matter of time until shippers do the same into the US East Coast and spot rates begin to fall sharply there too,” said Sand.
