January freight rates start to stall

BAROMETER. Ocean freight rates started to fall on most major routes in January, as the Chinese New Year approached. The new shipping alliances will come into operation in a difficult environment.

From November to mid-January, the shipping companies made use of a strategy which worked well for their financial situations. Thanks to numerous port call cancellations, the end-of-year demand peak was met, as expected, with limited capacity. This scenario, which was written in advance and announced by MSC, brought unexpected respite to the FAK rates market in the autumn and was adopted in the main by MSC's fellow operators. This technique enabled them to perform over expectation during the final months of the 2024 calendar year, thanks to a sort of finance sector-style end-of-year rally.

Spot market rates tumble

The trend began to reverse, however, in January. Demand, which had been stimulated in the preceding months by the end-of-year festivities and the increase in consumption associated with them, as well as by the prospect of additional customs duties on exports to the United States, began to weaken. At the same time, the Chinese New Year celebrations got under way relatively early this year, on 29 January, which meant that Chinese factories began closing in mid-January. Production will only return to normal in mid-February and will coincide with the start of the new services...