Freight rates are down after Chinese holidays? Maybe not

Sea-carriers are determined to keep spot rates for containers high for as long as possible, hoping to lock in annual contract customers with rates of 100% or more.
Spot prices show no signs of falling after the start of the Chinese New Year holiday. Shippers who had hoped for a rate correction after the Lunar New Year holiday are now having to bite the bull and agree to higher contract prices rather than continue to risk the spot market.
Commenting on the tough market conditions for shippers, Gordon Downes, chief executive of the NewYork Shipping Exchange, a digital contracts platform, said he did not expect rates to fall "for a few years" after the new crown. "In fact, I think the industry is at the beginning of a structural upcycle." "He added.
The latest Baltic Freight Index (FBX) Asia to Northern Europe spot freight rate rose 3% from the previous week to $8,430 /40 ft on February 19, up 145% from the beginning of December and up 428% from the same period last year.

In addition, spot shippers have to pay a number of additional charges, including container storage fees and expedit-booking fees, with UK importers paying an average of $2,000 per case - what some carriers privately call a "departure surcharge".
Toto Dirgantoro, chairman of the Asianshippers' Alliance, complained this week: "The current strategy of shipping lines is to accept bookings based on profitability or long-term strategic importance, and small and medium-sized shippers are being sacrificed."
Although there is a shortage due to the quarantining of domestic tow truck drivers ahead of the Chinese New Year, it is clear that carriers still have a large backlog of goods to clear before they can start chasing orders.
A British freight forwarder recently fumed that the "2M" alliance had cancelled Sunday's MSC Erica voyage at the last minute "more to keep capacity tight than to improve the reliability of the schedule".
In addition, spot prices from Asia to eastern Mediterranean ports rose 3 per cent this week to $7,893 per 40ft, up 270 per cent from 12 months ago, according to FBX. The one-day rate reached $7,969 on Feb. 19.

According to the latest data released by the Shanghai Shipping Exchange on February 19, the Shanghai Export Container Composite Index was 2875.93, up 1.8% compared with the previous period.

SCFI: Shanghai to European base port market freight rate (sea freight and sea surcharge) is USD4281 /TEU, an increase of 4.2% compared with the previous period. The market freight rate of Mediterranean route decreased slightly due to the fall of the cargo volume during the Spring Festival. The market freight rate to the basic Mediterranean port (sea freight and sea surcharge) was USD4252 /TEU, down 0.7% compared with the previous period. North American route market freight rates remain near the previous level.
On the similarly hot trans-Pacific trade route, demand for capacity from Asia to the United States is inevitable: Ships arriving this week were loaded with 185,000 TEUs of imported cargo, up 331% from a year ago, according to Signal, a platform based at the Port of Los Angeles, on Tuesday.

Container ships docked in Los Angeles and Long Beach, however, had to wait an average of 8.3 days to unload their cargo, up from 8.0 days. It has been reported that 35-40 ships a day are waiting at anchorage, so the carrier is looking at other ports

After several weeks of stagnation, spot rates from Asia to the US west coast hit a new record of $4,654 per 40 feet last week, up 7 per cent from the previous week, according to FBX. The one-day rate hit a record $4,709 on Feb. 19.

East Coast ports have also picked up after a brief decline, reaching $5,703 per 40 ft in the week just past -- up 8.0% from the previous week; The one-day rate reached $5,960 on Feb. 19.

"The ongoing rush hour and congestion has some US retailers worried that Easter related shipments will not arrive in time, while shippers report that all ships are fully booked by the end of the month," said JudahLevine, head of research at Freightos.

What is your opinions about the situation of the freight rate from China?