Tough Times and rough seas for the ocean carriers with significant exposure in this trade lane. A lower than expected post Chinese New Year demand, combined with ample capacity clearly pushed rates downward. Let's dive into Captain Upply's outlook for this week.
Surprising? Not really, it has a lot to do with seasonality and the early year slowdown is something commonly anticipated by the carriers. However, 2019 is special: The decrease is still accelerating despite massive blank sailings and suspended service announcements due to the low volumes available.
Big European names in the retail industry are currently in their yearly tender negotiations with ocean carriers, announcing a decrease of the size of the pie, regarding the volume of TEUs available. This kind of news in a depressed market is directly affecting Spot rates.
Easter will be a tough time for the carriers in this corridor. We anticipate a P&L deterioration coming for the next 3 months. « Cash is king », and in those circumstances the carriers with heavy debt in conjunction with a low cash situation will suffer the most.
To discover the latest trends on ocean freight rates, go to the benchmark page of upply.com!
See you next week,
Photo Credit : Pixabay