The surge in container freight rates initially observed on the Asia-Europe trade route and then affecting the transpacific is now poised to impact transatlantic shippers. Spot rates from North Europe to the US East Coast have remained below par for an extended period, a notable drop from the pre-pandemic. The recent announcement from Maersk regarding a Peak Season Surcharge (PSS) from North Europe to the US and Canada, effective from February 5, reflects the dynamic market situation disrupting global trade.
CMA CGM has initiated a “rate restoration initiative” for the trade from European ports to the US, Canada, and Mexico starting January 21. These PSS and rate restorations, combined with previously planned General Rate Increases (GRIs), are expected to impact container spot rates immediately despite weak demand on the transatlantic route.
Simultaneously, Asia-Europe carriers have declared force majeure on bill of lading contracts, introducing surcharges such as transit disruption and emergency contingency surcharges. New Freight All Kinds (FAK) rates have been announced, exemplified by CMA CGM charging $6,000 to ship a 40ft container from Asia to North Europe starting January 15.
Given the recent events in the Red Sea, MSC rerouted its fleet around the Cape of Good Hope. This diversion increases transit time and will have a global impact on capacity and equipment availability and positioning. On January 21st, 2024 MSC will implement the Emergency Operational Surcharge (EOS) of USD 1’500 per container on all shipments from EMED and Black Sea to USA for both dry and reefer boxes.
On the Asia-North Europe route, container spot rates are soaring, evidenced by Drewry’s WCI Asia-North Europe component, which surged 115% in a week and 91% year-on-year. Transpacific rates are also witnessing an uptick, with Asia-US West Coast rates up 30% in a week and East Coast rates rising 26% per 40ft. The impending spike in Asia-US West Coast rates is attributed to Panama Canal draught restrictions and Suez Canal diversions impacting all-water Asia-US East Coast services. The container freight rate contagion is intensifying, creating challenges and uncertainties across major trade routes.
Coppersmith will continue to monitor and update the ocean freight situation and bring information to this space. Please reach out with any questions or concerns.
