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 yr. These agreements evaluate to present spot charges above $3,000 per feu.
“Whereas the newest contracts are a bump from final yr’s ranges, they continue to be near break-even ranges, highlighting liners’ lack of ability to seize stronger long-term charges given the availability outlook even towards a stronger than anticipated market this yr,” 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 giant helpful cargo proprietor (BCO) charges anticipated to return 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 yr forward of covid.
“These charges signify a slight improve in comparison with final yr, however are considerably under carriers’ preliminary asking charges,” Tan informed Splash, discussing this yr’s contract negotiations, a course of which has been extended and troublesome this yr with shippers having to think about Purple Sea diversions alongside a transparent overcapacity constructing within the container fleet with multiple newbuild delivering day-after-day this yr.
The American economic system stays sturdy with newest knowledge from Descartes exhibiting the US imported 2.1m teu final month, up 21% in contrast with the identical month in 2019, pre-covid.
“March 2024 was a powerful month and continues the sturdy efficiency that started in January 2024,” stated Chris Jones, govt 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 surroundings, argued Sea-Intelligence, a Danish liner consultancy, in its newest weekly report.
Pricing on this business, 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 strain on charges – which can be what’s presently unfolding,” Sea-Intelligence acknowledged.