Three voyages from Asia to Northern Europe are set to be canceled next month by the 2M Cooperation, a container shipping industry alliance between Maersk Line and MSC.
China's export demand has decreased as a result of the worldwide epidemic, military conflicts, port congestion, and other reasons, and container spot freight costs are under rising pressure. Three voyages from Asia to Northern Europe are set to be canceled next month by the 2M Cooperation, a container shipping industry alliance between Maersk Line and MSC.
MSC and Maersk, 2M partners, have withdrawn the Griffin/AE55 sailing for the first week of May and will cancel two Shogun/AE1 sailings in the following weeks.
MSC cited "continuing adverse market conditions leading to congestion and delays across the supply chain" as the reason for the cancellation but stated it would take bookings for "other services."
The suspension of 2M and the other two partnerships, according to Loadstar, is considered an attempt to stop the decrease in freight prices since freight orders from China have collapsed as a result of the coronavirus lockdown and intermodal limitations. Export orders are expected to plummet by more than a third in the coming weeks, according to Loadstar. Despite the fact that Shanghai has restarted operations, several factories and warehouses remain shuttered, and trucking efficiency remains low.
On the 22nd, Ningbo's Container Freight Index (NCFI) reported that certain operators from Asia to North Europe have begun to "reduce rates" in order to attract space reservations. However, the impact on the spot freight index has been little so far, similar to the situation following the Spring Festival. This is typical of low demand before the peak season starts in the off-season.
Drewry's WCI and Baltic Freight Index (FBX) both decreased roughly 2% to $10,364/FEU and $11,659/FEU, respectively, while Xeneta's XSI Nordic Freight Index plummeted 4% to $10,849/FEU.
In the meanwhile, spot rates in the trans-Pacific area remained consistent this week, with the WCI (Drewry) and XSI (Xeneta) US West Coast freight indices scarcely shifting at $8,758 and $8,595, respectively /FEU, while the Baltic Freight Index FBX (with premiums) at $15,552/FEU.
The "baseline assumption," according to Lars Jensen of Vespucci Maritime, was that freight rates would "continue to decrease by roughly 5% until starting to rebound approaching the peak season."
According to the company's data platform Signal, the number of imported containers arriving at the port of Los Angeles is down roughly 20% this week compared to the same period in 2021. The volume of cargo coming at LA ports next week will be approximately 16% from a year ago.
At the same time, the decrease in imports has resulted in a considerable drop in vessel wait times, with an average wait time of 2.7 days for ships to dock and work at the Port of Los Angeles, according to Signal data.
Nonetheless, CNBC senior editor Lori Ann LaRocco warns that the wave of containers that will arrive on the US west coast once Shanghai is completely reopened will come just a few weeks before the present labor contract expires. And it will raise the possibility of strike action if history repeats itself.
"This wave of containers will strike the west coast in June/July, during the ILWU labor contract's last weeks," she said.
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