The increase in freight rates in this segment of the Asia-Europe trades is tending to level off. Prices are stabilising at around the median rates recorded in mid-July last year.
Since the start of the coronavirus crisis, the shipping companies have been managing their capacity very closely. This has enabled them to maintain freight rates at unexpectedly high levels, given the the fall in global demand. Upply's data for the port to port transportation of a 40' dry HC container, including THCL and THCD, from Ningbo to Le Havre shows some signs, however, that the upward trend is starting to run out of steam. This is corroborated, moreover, by the reaction to the rate increases announced by the shipping companies for August 1. On the basis of the first responses we have heard about, these increases have not found favour.
Source : Upply "Compare and Analyse"
This trend can be explained by a number of factors :
- Major shippers, who have too often seen their containers left on the quayside (rolled over) over last six weeks, have begun threatening to change company.
- Extra capacity brought in at the last minute by some alliances on a spot basis (sweeper service), even if this is only happening on a very limited basis as a way of moving what is strictly necessary.
- The uncertain start of the peak season as Covid-19 circulation figures in Europe push shippers to show extreme caution.
- Concern among shipping companies that excessively high freight rates could cost them dear in the event that they attract new competition from market outsiders just when prospects for cargo volumes are particularly uncertain.