It should be peak season. But instead, ocean spot rates seem to be plummeting on all export routes from China.
In fact, according to the NCFI, every one of the 21 routes it tracks is currently trending in the red. The North Europe and Mediterranean routes are over-supplied, while the demand for transpacific services is unusually low.
The general view is that the supply/demand scales are shifting back in favour of the shipper, with both short-term prices and long-term contract rates falling.
“There is a fairly material easing of demand, and we also see that in the bookings and the quotations being requested.”
Rolf Habben Jansen
Mr Habben Jansen commented that transpacific bookings were “holding up reasonably well”, in contrast with Europe, where there was “more nervousness” being shown by consumers.
However, the latest Global Port Tracker report predicts a further decline in US trade over the coming months.
“The heady days of growth in imports are quickly receding. The outlook is for a decline in volumes compared with 2021 over the next few months, and the decline is expected to deepen in 2023.”
Ben Hackett, Hackett Associates
What does this mean for shipping? Blank sailings. It is predicted that ocean carriers will aim to blank as much capacity as possible in an attempt to level up the supply/demand equation. In addition, the planned eight-day strike at Felixstowe, scheduled to start on 21 August, will further reduce capacity as several carriers will be sitting out the industrial action.