Spot Rates Continue to Fall in North Europe Despite Temporary Jump
Despite an unexpected leap in the Freightos Baltic Index (FBX) earlier this month – propelling the container spot rate to above $10,000 – overall rates in North Europe look set to continue to fall, suggesting the sudden rise to be only a temporary blip.
In what would typically be a peak season, the Ningbo Containerized Freight Index (NCFI) showed all of its 21 routes to be trending in the red and noted that the North Europe and Mediterranean routes in particular were over-supplied with rates continuing to decline.
After reports of record-breaking quarterly profits from ocean carriers, there is a general feeling of acceptance that supply and demand scales are readjusting in favour of shippers. Some carriers are now struggling to fill their ships on North Europe routes and as a result, many are sailing light.
What is happening to US spot rates?
On US routes, consumer appetite for goods is keeping load factors at a health level, with the CEO of Maersk reporting a “very strong demand” for retail and lifestyle goods. However, despite this, spot rates from Asia to America’s west coast are declining, having already fallen around 60% from a year ago.
East coast rates, where port congestion has been a significant factor, appear to be more stable, slowing only slightly. Meanwhile, on transatlantic routes, capacity restrictions and strong demand, mean that rates remain high, with the FBX Europe-East Coast index still around 4.9 times higher than it was pre-pandemic.
However, the latest Global Port Tracker report warned that import growth is receding and that a decline in volume is expected for the remainder of 2022 and this is predicted to deepen further in 2023.
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