Carriers put on a brave face amid further decline in ocean spot rates
Container spot freight rates on the main east-west trades saw another week of declines, although, in contrast to most of January and February, the falls this week were led by the Asia-North America trades.
Whereas the weekly falls in spot freight rates so far this year have largely taken place on the Asia-North Europe and Asia-Mediterranean routes, this week saw the steepest declines occur ex-Asia, to the US west and east coasts.
Drewry’s World Container Index’s (WCI) Shanghai-Los Angeles leg saw the spot rate decline 11% week on week, to end at $3,477 per 40ft, while the WCI’s Shanghai-New York leg dropped 10% week on week, to end at $4,593 per 40ft.
In contrast, the WCI’s Shanghai-Rotterdam leg saw spot rates slip just 1% this week, to $2,586 per 40ft, while the Shanghai-Genoa leg was down 2% week on week, to £3,747 per 40ft, providing carriers with some optimism that the spot declines on both trades – ongoing since the beginning of December – may have hit some kind of floor.
Liner analysts largely believe the spot rate declines will continue, given the large amount of new capacity that continues to hit the water on a weekly basis.
“We expect freight rates will continue to soften as vessel supply growth outpaces demand, an end to front-loading, and a return to Suez transits will catalyse this trend,” analysts at MSI wrote this week.
Indeed, they added: “Barring no major black swan event, we believe freight rates will drop substantially over 2025, meaning that GRIs scheduled for March are unlikely to hold, putting the market in a very different position to the highs seen in 2024.”
However, carriers are clearly hoping the GRIs will stick, if quotes for China-UK from the beginning of March are a proxy for the main Asia-North Europe trade. ONE, Hapag-Lloyd, and HMM are offering rates around $4,100 per 40ft, which is bang in line with Hapag-Lloyd’s published 1 March FAK announcement.
At the other end of the scale, however, Maersk is offering $2,500 per 40ft on a pre-paid spot basis, and Yang Ming $3,050 per 40ft, and the expectation among many customers is that rates will continue to come down.
“Carriers are being very bullish – even as rates slide, they deny it and advise they have control and the market is congested,” one forwarder said.
“We will see how long it is before the greasy slope drops rates down to the bottom of the hill.
“Hopefully it won’t – but I can’t see how it can be avoided,” they added.
