{"id":136598,"date":"2024-10-04T16:52:11","date_gmt":"2024-10-04T06:52:11","guid":{"rendered":"https:\/\/www.worldcargonews.com\/?p=50476"},"modified":"2024-10-04T16:52:11","modified_gmt":"2024-10-04T06:52:11","slug":"container-spot-rates-take-a-tumble","status":"publish","type":"post","link":"https:\/\/www.vibewire.com.au\/?p=136598","title":{"rendered":"Container spot rates take a tumble"},"content":{"rendered":"

<\/span>Prices on the international market for shipping containers are falling. Spot rates for boxes have dropped 43% in Q3 of 2024. That might be good news for everyone with something to be moved, but for container agents, that\u2019s the worst outcome in any year not affected by the COVID-19 pandemic.<\/p>\n

Container spot rates have only ever once seen a bigger fall in the third quarter. The only comparable third quarter to see a bigger decline in spot rates was in 2022. That price slap came after a sustained 24-month boom in cargo volumes, fuelled by high consumer spending during the pandemic, was replaced by a quick drop in volumes and spot rates. The last full week in September saw a remarkable 10% drop alone.<\/p>\n

Quick response and market volatility<\/h2>\n

\u201cThe Shanghai Containerized Freight Index [SCFI] fell another 10% in week 39,\u201d says Niels Rasmussen, Chief Shipping Analyst at the Baltic and International Maritime Council (BIMCO), the representative international shipping owners association. \u201cIn total, the SCFI has dropped 43% during the third quarter, the largest Q3 drop in a year not affected by the COVID pandemic (2020-2023) since the SCFI was launched in October 2009.\u201d<\/p>\n

The SCFI measures spot container rates for container loading in Shanghai. It gives a strong indication of the market\u2019s supply and demand balance. It\u2019s also a useful day-to-day tool for the logistics sector. Carriers can quickly adjust spot rates up or down in response to high or low capacity utilisation. Contract rates are often slower to respond to changes in market conditions.<\/p>\n

US East Coast port strike effect<\/h2>\n

The trend is not confined to one index. \u201cThe China Containerised Freight Index [CCFI] that measures average freight rates for containers loading in China has fallen 19% during the third quarter,\u201d explained BIMCO\u2019s Neils Rasmussen. That is also the worst third-quarter development in a non-COVID year. It has been over a decade – not since 2009 – that comparable figures have been recorded.<\/p>\n

\"\"
Niels Rasmussen, Chief Shipping Analyst at the Baltic and International Maritime Council – BIMCO<\/figcaption><\/figure>\n

Freight rates to key trades into Europe, the Mediterranean, US West Coast and US East Coast, have been among those declining the most. Spot rates to Europe and the Mediterranean have dropped nearly 55% whereas average rates are down about 20%. The US West Coast and US East Coast markets have seen spot rates fall about 40% and average freight rates nearly 20%. How those prices might be affected by the dock strike on the US East Coast could become apparent very quickly.<\/p>\n

BIMCO analysis points to an earlier than normal peak in volumes along with lower bunker prices, which may help explain the adverse development in third quarter rates. BIMCO believes the strike in US East Coast and Gulf Coast ports<\/a> may temporarily help lift rates to those markets as well as the overall indices.<\/p>\n

Charter rates stable amid global unrest<\/h2>\n

Time charter rates and freight rates have historically moved together. However, in the third quarter, average time charter rates remained stable. The limited availability of ships has supported rates, and the Red Sea rerouting continues to underpin demand. At the same time, the upcoming changes to global alliance structures may also add demand as carriers look for the ships required in the new service plans.<\/p>\n

\u201cDespite the SCFI and CCFI remaining 140% and 90% higher than last year, the medium- to long-term freight rate development must be a concern for carriers, especially if ships can return to the Red Sea<\/a>,\u201d observed Rasmussen. \u201cThe 10% of the fleet that has been absorbed by the rerouting will at some point be released and add to supply growth along with any fleet growth [which is expected to be nearly 7% in 2025]. It therefore appears unlikely that demand will be able to keep pace,\u201d he says. It would appear that the market will be volatile for some time to come, and with world affairs in heightened turmoil, the direction of next quarter\u2019s figures could provide for some further surprises.<\/p>\n","protected":false},"excerpt":{"rendered":"

Prices for international shipping containers are falling. Spot rates are down almost a half in the third quarter and 10% in the last week of September.<\/p>\n","protected":false},"author":10,"featured_media":50480,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[13724,13725,13726,12629,13723,13727,471,13728,13729,13730],"tags":[12159],"class_list":["post-136598","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bimco","category-ccfi","category-china-containerized-freight-index","category-container","category-container-industry","category-neils-rasmussen","category-news","category-scfi","category-shanghai-containerized-freight-index","category-spot-rates","tag-world-cargo-news"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/136598","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=136598"}],"version-history":[{"count":3,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/136598\/revisions"}],"predecessor-version":[{"id":136746,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/posts\/136598\/revisions\/136746"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=\/wp\/v2\/media\/50480"}],"wp:attachment":[{"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=136598"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=136598"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vibewire.com.au\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=136598"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}