We use cookies to provide you with a better experience. By continuing to browse the site you are agreeing to our use of cookies in accordance with our Cookie Policy.
  • ::COVID-19 COVERAGE::
  • INDUSTRY PRESS ROOM
  • ABOUT
  • CONTACT
  • MEDIA FILE
  • Create Account
  • Sign In
  • Sign Out
  • My Account
Free Newsletters
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
  • MAGAZINE
    • Current Issue
    • Archives
    • Digital Edition
    • Subscribe
    • Newsletters
    • Mobile Apps
  • TRANSPORTATION
  • MATERIAL HANDLING
  • TECHNOLOGY
  • LIFT TRUCKS
  • PODCAST ETC.
    • Podcast
    • Blogs
      • Analytics & Big Data
      • Best Practices
      • Dispatches
      • Empowering Your Performance Edge
      • Logistics Problem Solving
      • One-Off Sound Off
      • Public Sector Logistics
      • Two Sides of the Logistics Coin
      • Submit your blog post
    • Events
    • White Papers
    • Industry Press Room
      • Upload Your News
    • New Products
      • Upload Your Product News
    • Conference Guides
    • Conference Reports
    • Newsletters
    • Mobile Apps
  • DCV-TV
    • DCV-TV 1: News
    • DCV-TV 2: Case Studies
    • DCV-TV 3: Webcasts
    • DCV-TV 4: Viewer Contributed
    • DCV-TV 5: Solution Profiles
    • MODEX 2020
    • Upload Your Video
Home » Ocean "spot" rates hit six-year lows in April, consulting firm's index shows
newsworthy

Ocean "spot" rates hit six-year lows in April, consulting firm's index shows

May 21, 2015
DC Velocity Staff
No Comments

Ocean container "spot market," or noncontract, rates fell to their lowest levels last month since the Great Recession in 2009, weighed down by the now-familiar culprits of subpar demand and an oversupply of ships, according to an index published today by a leading maritime consulting firm.

U.K.-based Drewry Maritime Advisors said spot rates on 40-foot equivalent unit (FEU) traffic across 600 major trade lanes declined in April to about US$1,613 per FEU, which on most trades is the lowest level in six years. Record lows were plumbed on U.S. westbound trans-Pacific trades as well as on trans-Atlantic eastbound services from the U.S. to Europe. In January, the overall index stood above US$2,100 per FEU.

The westbound trans-Atlantic lanes and trans-Pacific eastbound service from Asia to the U.S. East Coast were the only trades where pricing has any degree of firmness, Drewry said. That is due to relatively strong end demand in the U.S. economy, a rising dollar that makes foreign imports more competitive in world markets, and, to an extent, concerns over labor unrest at West Coast ports that triggered an increase in containerized shipments from Asia being diverted to East Coast locations.

The sweeping study excludes intra-Asian sea container traffic. But there the situation is no better: Intra-Asian rates in April also hit record lows, Drewry said.

Meanwhile, contract rates are higher today in many lanes than they were at this time in 2014, Drewry said. The firm noted that carriers negotiated higher rates with cargo owners early in the year, and that a conference representing ship lines in the eastbound trans-Pacific trade recommended a series of general rate increases in April, June, and July, as well as a peak–shipping-season surcharge effective July 1. Drewry also said many carriers have sought to exit unprofitable contract positions, moves that can push up contract rates for some shippers. The firm expects contract rate levels to decline during the balance of the year, however.

Simon Heaney, senior manager, supply chain research for Drewry, said demand out of Asia is "very patchy right now, with some trades up and others down." The Asia-Europe trade, the world's biggest sea trade lane, posted a 1-percent decline in volumes in the first quarter, the first drop in two years, Heaney said.

The mediocre demand outlook is amplified by the large amount of vessel capacity hitting the water for the next three years. Through the rest of the year, about 630,000 20-foot equivalent units (TEU) ships, with each holding at least 10,000 TEUs, are scheduled for delivery, with similar levels slated for 2016 and 2017, Drewry said. Heaney noted that the order book for 2018 and 2019 is already filling up. All of the megaships at 14,000 TEUs and higher will enter the Asia-Europe trade, putting more than 500,000 TEUs on the lanes for the rest of the year alone, according to Drewry forecasts. Carriers placed a huge bet years ago on megaships in the belief that they will offer unprecedented economies of scale, Drewry said. That bet could still pay off, but in a market plagued by slowing demand, the amount of overcapacity in the market puts carriers at a huge financial risk, the firm said.

Transportation Maritime & Ocean
KEYWORDS Drewry Supply Chain Advisors
  • Related Articles

    Index tracking air, sea activity in four key trades hit new lows in December

    Trailer orders, shipments hit six-year high in 2012, firm says

    Dry van spot rates hit near three-year high, DAT says

  • Related Events

    DigiMarCon East 2021 - Digital Marketing, Media and Advertising Conference & Exhibition

    Project:Future / Retail & Fashion - Re-engineering for Profitability

Recent Articles by DC Velocity Staff

Global air cargo demand returned to pre-Covid levels in January

Descartes expands customs compliance toolkit with $36 million QuestaWeb acquisition

CMA/CGM to add LNG-powered ships to U.S. service

You must login or register in order to post a comment.

Report Abusive Comment

Most Popular Articles

  • Relaxed regulations for drone parcel delivery to take effect in March

  • IBM survey says digitalization trends will sweep trucking industry by 2030

  • Gartner survey signals increased investment in resilience over the next two years

  • What Level of Automation is Right for Your Warehouse?

  • Old Dominion adds nine freight service centers to handle business growth

Now Playing on DCV-TV

D92f0dd1 a98c 434a 9e17 30b63ee72c90

Automated Pack-out and Print-Apply System for thredUP

DCV-TV 4: Viewer Contributed
SilMan Industries designed and implemented a mixed polybag-carton system, including automated print and apply, in a new regional Fulfillment Center for thredUP, one of the world’s largest online resale platforms for women’s and kids’ apparel, shoes, and accessories. The Situation Secondhand clothing and online...

FEATURED WHITE PAPERS

  • Time to rethink your lift truck power

  • Warehouse Management System Project Toolkit

  • Solving Talent Management Challenges Now and In the Future

  • Shaping Up Last Mile Delivery to Surpass Customer Expectations

View More

Subscribe to DC Velocity Magazine

GET YOUR FREE SUBSCRIPTION
  • SUBSCRIBE
  • NEWSLETTERS
  • ADVERTISING
  • CUSTOMER CARE
  • CONTACT
  • ABOUT
  • STAFF
  • PRIVACY POLICY

Copyright ©2021. All Rights ReservedDesign, CMS, Hosting & Web Development :: ePublishing