Transpacific freight rate slide appears to continue

Time:2010-10-09 Browse:37 Author:RISINGSUN

TRANSPACIFIC ocean freight rates have been falling and added capacity and slow inventory restocking in the US threatens to add more downward pressure.

"Traffic in and out of China is softening," said Byron Lee, managing director of forwarder China Global Lines. "Carriers do not have full ships and rates have dropped every week [since August]. It is a good time to canvass for new business, as we face no space problems and carriers are flexible and offering lower rates."


"The transpacific peak season ended just as carriers added more capacity," and unnamed forwarder told London`s International Freighting Weekly.


Analyst Ed Wolfe told IFW that US inventory restocking had peaked in the second quarter when 50 per cent of shippers polled reported more shipping activity.


"A more modest 35 per cent of shippers expected higher-than-normal shipping activity in the third quarter," he said. "With inventory restocking seemingly slowing, survey respondents now expect around a four per cent increase in same store shipment volumes over the next 12 months, down on a five per cent expectation last quarter."


One carrier source said lines were struggling to introduce transpacific general rate increases and peak season surcharges, adding that slot utilisation had dropped.


"There have been a lot of capacity additions on the transpacific because demand on Asia-Europe wasn`t there. Also, there have been some new entrants, such as Hainan Pan Ocean, Matson, Horizon and The Containership Company," he said.


Last month, the New Shanghai Containerised Freight Index declined to below US$2,500 per FEU to the US west coast, down from more than $2,800/FEU in July.