In recent weeks, we’ve observed significant developments in vessel capacity and rate adjustments across various trade lanes.
Here’s a summary of the key points:
Vessel Capacity and Rate Surge: There has been a significant surge in market rates, largely propelled by prominent carriers such as COSCO, OOCL, and ANL, who have escalated rates for the second half of May. This upward trend has been followed by other carriers. However, the spike in rates has not been accompanied by a proportional increase in actual booking volumes.
Blank Sailings and Demand: While April witnessed some blank sailings, the frequency has decreased in May. However, market demand remains relatively low, adding to the complexity of understanding the rate increases. Despite the challenging demand outlook, carriers have shown confidence in pushing up rates significantly.
General Rate Increases and AU/NZ Trade Lane: Rates for major trade lanes such as those connecting the US, Europe, and South America have surged above or around $4000+/40’HQ. Carriers have issued warnings to AU/NZ trade managers, indicating that failure to increase rates could result in the withdrawal of more vessels from the AU trade lane. This is particularly concerning as vessels operating in this lane, with capacities ranging from 4000 to 6000 TEUs, are more easily shifted to other trade lanes.
Carrier Flexibility and Rate Restoration: Carriers are adopting a more flexible approach to managing vessel capacity, including the strategic withdrawal of vessels, reducing capacity by shifting larger vessels to smaller ones, and implementing blank sailings. These decisions are often communicated with short notice, adding to the challenges faced by shippers & importers. In response, carriers have announced a Rate Restoration initiative aimed at restoring rates to levels that reflect the increased costs and challenges associated with maintaining vessel capacity and meeting market demand.
Based on these developments, a General Rate Increase (GRI) is likely to take effect from 1st June. This measure is designed to realign rates with the dynamic market conditions and ensure the sustainability of carriers’ operations.
We recognise that these adjustments may impact your shipping costs and strategies, however it is important to note that nothing is definitive until officially announced.
Our Customer Solutions team remains committed to supporting you and will keep you updated on any official announcements as they arise.
Please feel free to reach out to your dedicated account manager if you have any questions or require further clarification.
Thank you for your continued partnership and trust in our services.
