Our Upply data identified a significant drop in rates, nearly 10% for the 40’ HC market in the past week for this Transpacific Eastbound lane. More interesting to note, is that the Transpacific to the U.S. East Coast via Panama remains very stable.
We analyze the significant drop in rates to the U.S. West Coast to be in line with the announced general vessel upgrades on this trade lane, even if the demand is currently well oriented. All the key players are in the process of replacing older capacities with upgraded new ones by nearly 40% compared to what was existing in December 2018.
More interesting to note, is that the Transpacific to the U.S. East Coast via Panama remains very stable, as vessel upgrades haven’t started across the board (new panamax Vessels of 14 000 TEU's recently under test).
A strong bet
At the end of the day, we don’t foresee an increase of the number of vessels between Asia and the U.S. West Coast, but we expect the new installed standard to be 18000 TEU’s+ per vessel as an average for the key players on this route.
West Coast congestion in ports and local related warehousing acceptancy levels are reported to be "back to normal" which is a positive sign for a market rebound in terms of volumes.
We forecast a strong bet from the carriers to deploy some extra capacity in the very tense political climate we experience these days.
It’s too early to really assess the impact of the Trump administration’s decision to hike customs tariffs from 10% to 25% on $200 billion dollars of goods (even if container friendly finished products were not the most finger-pointed so far).
Photo credit: Image par David Mark de Pixabay