It seems the ocean peak season has come to an end. Reports suggest that ocean carriers are now offering significant discounts on Asia exports to the US and Europe as we head into the traditional slack season.
The discounting and waiving of premium fees for late November and December shipments have caused a mini-collapse in container spot rates. According to the Freightos Baltic Exchange (FBX), spot rates from Asia to the US west coast slumped by 26% in the first week of November.
“For the first time since June, there are reports that many transpacific bookings can be made without paying the hefty premiums that were a major factor in the July spike”
The Rise and Fall of Premium Fees
In July, unusually strong peak season demand, coupled with congestion at the US west coast hub ports of Los Angeles and Long Beach, led to a rise in premium fees. FAK rates soared, and turbo-charged premium fees were charged for shippers desperate to secure equipment and space on first-available sailings.
Now, it appears some carriers are reducing or even waiving those premium fees that can easily add $3,000 or more to the final invoice.
Prices Remaining Above the Norm
Container spot rates from Asia to Europe are continuing the downward trend from their September all-time highs. Transpacific base rates have also lost significant ground.
According to Freightos, the ocean peak season has come to a definitive end, with transpac rates dropping into a steep fall. However, prices are still higher than usual for this time of year.
“Importers will welcome the lower rates, but prices are likely to be kept well above the norm by port congestion, low inventories and still-elevated consumer demand.”
The next anticipated peak is in January, before the Chinese New Year holiday.