Both the Pacific and Asia to Europe rates have shown increases this week even after regulatory authorities in China, the US, Europe and South Korea have moved to monitor rates in both trades.
Asia to Europe rates were US$2,214/FEU today up from US$1,385/FEU on a year ago and by US$347/FEU on last week’s Freightos FBX11 index which recorded rates of US$I,867/FEU for 11 September.
Meanwhile, rates on the dynamic trades in the Pacific were also up as the FBX01 settled at US$3,805/FEU on 18 September an increase of US$22 on 17 September and US$104/FEU on 11 September levels. A year ago the FBX01 stood at US$1,140/FEU, less than one third of today’s levels.
Consultant Jon Monroe points to retail sales figures for August showing a year-on-year increases.
“According to the U.S. Census Bureau retail sales were up 2.6% in August when compared with August last year. According to the National Retail Federation, sales were up 5.6% in August when compared with last year. The difference is that the NRF focuses on pure consumer retail and doesn’t include automobiles, restaurants and gas stations. It is also reported that in spite of the stay at home culture under COVID, consumers will spend more on Halloween,” said Monroe.
Demand has now reached and surpassed the pre-Covid-19 levels, on the Pacific trades. It is not clear whether this trend will continue after the China’s Golden Week or even into the post-Halloween period.
According to Monroe the glut of cargo has seen NVOCC’s benefit with shippers offering “thousands of TEU” to the non-vessel operators because they can no longer get space from the carriers.
The lack of space and rising rates prompted regional regulatory bodies in Asia, Europe and the US have all expressed their concerns over the soaring rate increases with the US Federal Maritime Commission threatening court action for any foul play, while China’s Ministry of Transport and Communications has asked lines to refrain from further increases and to restore capacity.
Shippers in Korea have requested government intervention to restrain carriers from imposing further increases, amid fears for many smaller manufacturers and shippers who they say are under particular pressure.