BAROMETER. The shippers have found out how to get round the artificial pressure to increase rates in the container shipping market. Freight rates are no longer soaring despite persistent geopolitical tensions.
The route round the Cape of Good Hope, which is a regression if ever there was one in terms of shipping economics, is now almost accepted as a necessary evil and even a buffer solution which has allowed the shipping companies to bring new capacity on to the market without creating excessive turbulence. Now that the route has been in use for nearly a new year, however, the surprise effect has worn off. The new route has become the norm, even though fresh capacity is continuing to come on to the market and force freight rates down.
Demand trends
Cargo volumes in the transpacific trades remain solid, as first half port results show. According to preliminary statistics, the favourable trend held up throughout the summer. It can be explained by demand growth but also by the expectation of new orders. This is due in part to the imposition of additional customs duties on certain products from China since 27 September. At the same time, there has been a deterioration in the industrial relations climate between the cargo-handling companies and port workers on the east coast of the United States and in the Gulf of Mexico as they negotiate a master agreement covering relations...
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