Container shipping rates crash
Spot rates on transpacific routes have halved since the end of April.
The huge increase in freight costs that began during the early stages of the pandemic is beginning to unwind, with rates for shipping containers from China to the US Pacific coast halving over the past two months. The cost of moving goods around has been one of many inflation drivers of the past year, so the reversal will be a positive shift for consumers if savings are passed down along the supply chain.
Spot rates for shipping a 40-foot container on this key trade lane have fallen from $15,255 (£12,798) at the end of April to $7,568 by 1 July, according to booking platform Freightos. The Freightos Baltic Index (FBX) – an amalgamation of global spot rates – has fallen by 27 per cent over the same period.
Hefty surcharges that shipping lines were levying on customers to ensure containers were placed on vessels are no longer being applied as demand declines and congestion around key ports eases, Freightos chief marketing officer Eytan Buchman told Investors’ Chronicle.
Rates are sliding at a time of year when they generally increase as the peak shipping season ensues, when importers typically pay up to secure space on vessels ahead of back-to-school and Christmas trading periods. Spot rates are about 9 per cent lower than they should be given typical seasonal patterns – or about 15 per cent lower on transpacific routes, according to Vespucci Maritime chief executive Lars Jensen. This is an indication that importers are “seeing a slowdown in consumer spending”, he said.
By Michael Fahy and Marcus Ritson / Investors Chronicle
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