The primary batch of transpacific contracts are concluding for the Might 2024-April 2025 interval with analysts at Jefferies reporting Asia-US west coast charges are understood to be within the $1,400 to $1,500 per feu vary, up from $1,200 per feu to $1,300 per feu final 12 months. These agreements evaluate to present spot charges above $3,000 per feu.
“Whereas the newest contracts are a bump from final 12 months’s ranges, they continue to be near break-even ranges, highlighting liners’ incapability to seize stronger long-term charges given the provision outlook even towards a stronger than anticipated market this 12 months,” acknowledged a delivery markets replace from Jefferies yesterday.
Offering additional specifics on the offers being concluded, Hua Joo Tan, co-founder of Asia-based container advisory Linerlytica, defined that there are numerous tiers of contracts being concluded with massive useful cargo proprietor (BCO) charges anticipated to come back in at under the $1,400 to $1,500 vary, whereas smaller BCOs will are available at round that vary. The $1,400 to $1,500 vary was roughly what liners have been making on the spot market in 2019, the 12 months forward of covid.
“These charges symbolize a slight improve in comparison with final 12 months, however are considerably under carriers’ preliminary asking charges,” Tan informed Splash, discussing this 12 months’s contract negotiations, a course of which has been extended and tough this 12 months with shippers having to think about Purple Sea diversions alongside a transparent overcapacity constructing within the container fleet with a couple of newbuild delivering day by day this 12 months.
The American financial system stays robust with newest information from Descartes displaying the US imported 2.1m teu final month, up 21% in contrast with the identical month in 2019, pre-covid.
“March 2024 was a robust month and continues the strong efficiency that started in January 2024,” mentioned Chris Jones, government vp at Descartes.
A excessive diploma of variability in capability from week to week has been wreaking havoc on the power to take care of a steady pricing atmosphere, argued Sea-Intelligence, a Danish liner consultancy, in its newest weekly report.
Pricing on this trade, Sea-Intelligence maintained, is uneven.
“It’s simpler to decrease charges than to extend them. An unstable capability state of affairs will subsequently trigger an efficient downwards stress on charges – which can also be what’s at present unfolding,” Sea-Intelligence acknowledged.
