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Ocean shipping Rates Reflecting September Optimism - Freight Waves

Logistic News - Published on Thu, 12 Sep 2019

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Forwarders and ocean carriers are betting a major holiday in Asia and seasonal inventory building at US retailers will provide a boost to container shipping rates. Despite the short-term bump, one outlook for 2019 suggests the container shipping industry will remain challenged. Spot rates on one of the busiest ocean trade lanes for moving containerized goods are starting September at the highest level seen in nearly two months. The Freightos Baltic Daily Index for China-North America West Coast sat at USD 1,617 per forty-foot equivalent unit as of September 3. The index reflects spot transactions for capacity on eastbound trans-Pacific container ships.

The USD 329 per FEU jump from August 30 reflects the general rate increases that container ship lines have thus far pushed through to customers. Mediterranean Shipping Company issued a USD 1,000 increase per standard FEU for eastbound shipments from Asia to US ports starting in September. The increase drops to USD 600 per FEU on September 15. MSC is increasing rates as steamship lines are challenged to maintain service profitability since freight rates are at levels that are no longer sustainable. But it will not be the first carrier to push through an increase as rates remain weak.

APL, a unit of CMA CGM, likewise sought a USD 1,000 per FEU at the beginning of August. But with container shipping demand still uneven, spot container rates drifted from USD 1,565 down to USD 1,288 per FEU. But there is some reason for forwarders and container lines to believe the rate increases will stick thanks to heavier than usual demand in September, according to Freightos Chief Marketing Officer Ethan Buchman. China’s exporters are expected to push out more goods ahead of the country’s Golden Week celebration starting October 1.

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Posted By : Mohan Sharma on Thu, 12 Sep 2019
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