Six more blanked sailings over the past week mark the stabilising of the deepsea trades with demand now broadly matching available capacity, which has seen rates finding a similar stability.
Freightos Baltic rate movements over the past week reveal a gentle US$35/FEU increase during the first week of May, reaching US$1,441 by the end of the week. On the Pacific the headhaul trade has shown a steeper increase of US$110/FEU in the same period, hitting US$1,645/TEU, its highest level since September last year.
In the backhaul trades on the Pacific rates fell to its lowest level in more than a year by mid-March, falling to US$353/FEU, but has since recovered to US$467/FEU. Meanwhile, the Mediterranean eastbound cargo plateaued in mid-April at US$942/FEU and has since dropped back to US$911/FEU in the first week of May.
Sea-Intelligence said in its Sunday Spotlight publication this week, “Carriers are now only blanking very few additional sailings, and for the moment are satisfied that the currently announced blank sailings programme is sufficient to underpin the freight rate levels.”
Maritime Strategies International (MSI) believes that container shipping has been “in the eye of the storm,” over the past month. However, the shock of China’s production shutdown is now seeing the lines emerging from the Asian downturn.
Lines, “now face the full impact of the international spread of Covid-19. There will be no escaping financial pain this year, but so far it seems damage limitation efforts by liner companies have performed about as well as could have been hoped,” said MSI.
Near-term risks to freight rates remain according to the consultants, and the blanking of sailings will have lowered voyage costs. “The collapse in bunker prices, finally, provides much needed relief (bunker costs typically constitute around 15% of a liner company’s cost base),” added MSI.