This week, let's focus on a key corridor of Ocean Freight, Transpacific Westbound. As we observe a decline on this lane according to Upply benchmark, Captain Upply gives his outlook on the situation.
Transpacific Westbound is traditionally the non-dominant leg in this loop with freight rates showing facial values discounted by a third to a half compared with the Eastbound rates (explained by historical lower demand).
The tense political climate for a more than a year now between U.S. and China has been focused on the « soya war » which is related mostly with bulk cargo, not with the container market.
The announcement of some upgraded Liner capacities on this route, combined with cargo restrictions from the Chinese administration, are putting some additional pressure on the Westbound rates. Rates have declined by 20% since the beginning of the calendar year according to Upply figures.
Two containerized commodities to illustrate and to follow the trend as a benchmark in the container business are wines and milk powders from the U.S. West Coast. These two commodities will be good market markers to monitor in the weeks to come.
To discover the latest trends on ocean freight rates, go to the benchmark page of upply.com!
See you next week,
Photo Credit : Dreamstime