New Delhi — Container prices on the trans-Pacific route typically fall back in October when demand traditionally slows, but this year might be an exception as the shortage of containers in Asia is far from over and likely to persist in coming months.
Embattled Pacific International Lines (PIL) of Singapore has
slid out of the top 10 global liner rankings with further sales of its
dwindling fleet.
Hapag Lloyd, one of the largest container carriers, has
already announced rate rises for the trans-Pacific route of $960 and $1,200 for
20-foot and 40-foot containers, respectively, effective Oct. 15.
"As for trans-Pacific, there is a very strong demand
that simply outstrips supply even though we have deployed all services and
several extra loaders are in the market," the company told S&P Global
Platts.
"This means customers are pushing carriers for extra
space and offer to pay premium rates to get extra space, which is fueling the
current rate increase. The strong demand is further fueled by very
extraordinary robust retail sales in the US with all big retailers seeing
double digit growth in sales."
Meanwhile, Orient Overseas Container Liner has restored six
October sailings that were previously canceled, citing "expected demand
change in the market".
It won't be too surprising to see others follow suit,
sources said.
Even if there was a slowdown in demand after the Golden Week,
the carriers will rapidly withdraw capacity to keep prices elevated, if not at
record levels, Lars Jensen, CEO and Partner at Sea Intelligence Consulting,
said.
"They (carriers) have learned the game...I do not think
they are going to go back from that approach," Jensen said.
Platts Container Rate 5 –- covering North Asia to East Coast
North America -– was at $4,200/FEU on Sept. 11, an all-time high for that trade
lane and up 53% from June 1.
In the coming days, rates are likely to be supported by
persistent container shortage in Asian market due to a skewed import-export
ratio and supply-chain disruptions.
Availability of 40-foot containers might be a problem in
coming months as demand on the trans-Pacific route has been high and exports
outnumber imports, Shankar Varatharajan, General Manager, Global China
Logistics (Shenzhen) Co. Ltd, told Platts.
Meanwhile, government intervention to curb price rises was a
key factor to watch out for. According to media reports, China summoned
carriers on Sept. 11 to discuss measures to regulate the sharp rise in
trans-Pacific rates. The government advised carriers to cancel blank sailings
and to pass on the benefit of low oil prices to consumers, according to
reports.
SPGlobal — 16 Sep 2020