Latest news with #PeterSand
Yahoo
30-06-2025
- Business
- Yahoo
Container rates from key US trade partner plummet 39%
The latest weekly ocean container shipping market reveals a stark contrast in rate movements across major trade lanes, as the trans-Pacific trade from the Far East to the United States saw a dramatic decline. The market average according to analyst Xeneta on Far East to U.S. West Coast services has fallen significantly since a spike on June 1. Declining spot rates have all but erased that recent surge, with rates standing at $3,317 per forty foot equivalent unit on June 27, up just 6% from May 31, effectively neutralizing the recent upward trend. This trade lane is particularly impacted by the U.S.-China trade war, and it is evident that capacity is now more than meeting demand, empowering shippers to push back against peak season surcharges by carriers. In contrast, the market average on the trade from the Far East to the U.S. East Coast has seen a more moderate decline, falling 9% since June 1 to $5,990 per FEU. Despite this drop, the spot rate remains 43% higher on June 27 than on May 31 with the spread between the coasts reaching $2,673, the highest in 10 months. 'Average spot rates have plummeted from Far East to U.S. West Coast, down 39% since June 1, but it has not been so dramatic into the US East Coast with rates holding up stronger – for now,' said Peter Sand, Xeneta chief analyst, in a note. 'The trans-Pacific into U.S. West Coast is the key battleground for carriers when it comes to China exports, so spot rates have fallen harder and faster as they prioritized bringing capacity back onto this trade in the immediate aftermath of the lowering of 145% tariffs.' Meanwhile, average spot rates from the Far East into the Mediterranean and North Europe, which experienced jumps in early and mid-June, remain elevated. On June 27, rates to the Mediterranean were 5% higher and to North Europe 14% higher compared to June 1, indicating sustained demand in these regions. The trade from North Europe to the U.S. East Coast has seen little change, with the market average staying flat from a week ago at $2,105 per FEU. This represents only a 3% increase from May 31. This trade lane is currently influenced by negotiations between the European Commission and Washington on a new trade agreement before July 9, when a 90-day pause on higher tariffs is set to expire. 'Shippers are seeing how this game is playing out and are calling the carriers' bluff by pushing back on the higher rates and peak season surcharges,' said Sand. 'It is only a matter of time until shippers do the same into the U.S. East Coast and spot rates begin to fall sharply there too.' Find more articles by Stuart Chirls maritime chief 'not a big fan' of ocean carriers' 'approach' as agency reviews antitrust immunity Drewry: No 'lasting impact' from tariff break as ocean rates fall again With Mideast shipping on high alert, Maersk re-opens Israel portMaersk unveils new AI platform to simplify customs tasks The post Container rates from key US trade partner plummet 39% appeared first on FreightWaves.
CNBC
23-06-2025
- Business
- CNBC
Middle East ocean freight rates soar on Iran conflict, Strait of Hormuz shipping risks
Ocean freight rates to the Port of Khor Fakkan in the United Arab Emirates are surging as Israel continues to attack Iran and after a weekend which saw U.S. strikes on Iranian nuclear targets. Rates from Shanghai to the Khor Fakkan, which is situated on the UAE Indian Ocean coastline, are up 76% in comparison to mid-May, according to spot ocean freight rate data tracked by freight intelligence platform Xeneta. The average spot rates have reached $3,341 per forty-foot equivalent unit (FEU.) The Port of Khor Fakkan is located outside the Strait of Hormuz. Due to its location, the port is considered to be one of the most important transshipment hubs for the Arabian Gulf, the Indian Sub-continent, the Gulf of Oman, and the East African markets. "Shippers in the region have acted with caution as the level of risk has gradually increased," said Peter Sand, chief shipping analyst at Xeneta. "Shippers have been frontloading cargo in the most recent months, to bolster the supply chain from adverse disruptions to the flow of containerized goods." The Port of Khor Fakkan has had 81 vessels arrive within the past 24 hours, and 51 ships are expected to arrive in the next 30 days, according to VesselFinder. The conflict in the Middle East has elevated vessel security risks, which have added to operational costs. Vessels are also moving faster, which results in more fuel being used, which also adds to costs. Iran's parliament voted to approve a closure of the Strait of Hormuz on Sunday, but it may not follow through on the move, according to many experts. It is expected to target ships for attack or seizure as part of its retaliatory plans, including ships showing a public U.S. affiliation, according to maritime security firm Ambrey. One major oil tanker operator, Frontline, recently said it would accept no new contracts requiring travel in the Strait of Hormuz. The oil market and stock market reactions to the escalation in the conflict were muted on Monday, without major moves in either trade. But Sand said the spread in ocean freight rates is a leading indicator of risk and uncertainty. The spread refers to the difference between spot market rates and long-term contract rates. The higher the spread, the greater the indication of market volatility and potential risks for shippers. "During times like this, the spread in the market widens," said Sand. It is up from $50 to $1,101 over the past 40 days (May 14 to June 23), according to Xeneta. "The spread is showing the difference between what the smaller shippers, those without much negotiation power, versus the freight rates paid by the larger and stronger shippers," he added.
Yahoo
06-06-2025
- Business
- Yahoo
New world order: Ocean rates up 88% as shippers pounce on lower tariffs
It took one week for the frenzy to set in on the eastbound trans-Pacific. Mid-high average spot rates paid by shippers in the 75th percentile of the market for transit from the Far East to the U.S. East Coast have surged by an astonishing 88% since May 3, according to analyst Xeneta, now standing at $6,100 per forty-foot equivalent unit. This price jump reflects the willingness of shippers to incur higher costs to ensure the movement of goods, driven by the temporary window created by the U.S.-China reciprocal tariff pause. In that time, the Far East to U.S. West Coast average price tracked at $5,082 from $2,615 per FEU. The North Europe to U.S. East Coast average spot rate increased to $2,129 from $2,081 the previous 90-day respite from higher duties has led liner operators such as Cosco, Evergreen, Hapag-Lloyd and HMM to amplify their spot rate charges, Xeneta said, pushing for hikes as steep as $3,000 per FEU. Meanwhile, mid-high spot rates have also climbed by 67% from the Far East to the U.S. East Coast, reaching $7,180 per FEU by early June, as a significant number of businesses attempt to expedite shipments amid volatile trade conditions. The Far East to U.S. West Coast price was $6,100 per TEU. However, the price dynamics are not limited to the trans-Pacific trade. The mid-high shipping rate on the Far East to North Europe route has also seen an upward trend, rising by 32% since the end of May and currently priced at $2,704 per FEU. This increase occurs despite the four-week rolling average capacity offered on this trade lane hitting 346,000 TEUs as of June 5, a level not witnessed even during the peak of the COVID-19 pandemic shipping rush. 'The 88% increase in market mid-high spot rates on the trans-Pacific trade shows shippers are so concerned about getting goods moving again during the 90-day window of opportunity of lower tariffs that they are willing to pay more,' said Xeneta Chief Analyst Peter Sand, in a note. 'Right now, it seems carriers are telling shippers to jump, and some are replying, 'How high?''This spike in rates, according to Sand, is a temporary phenomenon. With capacity returning to the trans-Pacific route, the frantic rush of shipments is expected to subside. As supply chains gradually recover and inventories grow, the pricing pressures will diminish. Sand anticipates that spot rates will reach their peak in June before descending as capacity constraints ease. Additionally, the fluctuations in the trade have ripple effects on other routes, such as Far East to North Europe. Although indirectly affected by the U.S.-China tariff situation, this route feels the impact of global supply chain uncertainties. 'What happens in one region can quickly ripple across global supply chains,' Sand said. The looming threat of increased capacity pressure alongside geopolitical unpredictability is enough to push up spot rates even in these distant markets. Find more articles by Stuart Chirls week sees ocean container rates soarDirtier ports will hurt jobs, US maritime revival: AAPA Texas port completes $625M ship channel deepening project 'Fear and uncertainty' driving up China-US container rates The post New world order: Ocean rates up 88% as shippers pounce on lower tariffs appeared first on FreightWaves.
Yahoo
21-05-2025
- Business
- Yahoo
Trans-Pacific Freight Rates Soar as China Cargo Bookings Rebound
The 90-day reduction in tariffs on Chinese imports have sent bookings out of the country soaring almost immediately—and ocean spot freight rates are following suit. Numerous indices tracking rates on the trans-Pacific trade lane are seeing abrupt spikes in the cost to move cargo out of China toward to the U.S. More from Sourcing Journal US Footwear Manufacturers Tell Trump Tariffs Should Fund Onshoring Resurgence Trump Says US Will Set Tariff Rates For Trade Partners Canada Cools US Trade Tensions By Drawing Down Retaliatory Duties The Shanghai Containerized Freight Index (SCFI) released Friday said deliveries from Shanghai to U.S. West Coast ports soared 32 percent from the week prior to an index rate of $3,091 per 40-foot container. The Shanghai-to-U.S. East Coast route saw a healthy 22 percent week-over-week jump to $4,069. Drewry's World Container Index (WCI) saw weekly Shanghai-to-New York sailings take the highest growth rate at 19 percent to $4,350 per 40-foot container (FEU), while trans-Pacific routes reaching Los Angeles shot up 16 percent to $3,136 on average. For Drewry, both routes buoyed the total WCI composite across eight major East-West trade lanes, which increased 8 percent from the week prior, to $2,233 per container. Xeneta's newest data released Friday had Far East-to-U.S. West Coast average rates reaching $2,722 per FEU, with average East Coast-bound rates at $3,883. 'There is no time to waste for these shippers and the rush of cargo will put upward pressure on spot rates on trans-Pacific trades,' said Peter Sand, chief analyst at Xeneta, in a weekly update. 'Spot rates will peak and then flatten as carriers redeploy capacity to match demand, then rates will begin to slide again just as we saw in Q1. This is expected to happen over the next two to four weeks.' With rates naturally increasing due to the quick turnaround in ocean freight demand, container shipping liners no longer have to resort to artificially propping yields up by cutting capacity via methods like blank sailings or vessel swapping. According to Drewry's container capacity insight online tool, blank sailings from Asia to the West Coast of North America will decrease 28 percent month-on-month from 33 in May to 24 in June. The number of blank sailings from Asia to the East Coast of North America will decrease from 23 in May to 17 in June, a 23 percent drop. This will result in double-digit increases (or returns) of ship capacity to these trades, after the recent cuts. 'It is a feature of the current volatile macro-environment that ocean carriers are 'cancelling cancellations' of sailings,' Drewry said in a post on LinkedIn. 'We notice that the container shipping market is reacting to trade policy announcements with swings in trade volumes, capacity volumes and spot prices, similarly to the stock market.' CMA CGM, which saw freight bookings for China exports to the U.S. get cut by 50 percent after President Donald Trump began his escalation of tariffs on April 3, is another ocean carrier seeing the quick rebound in bookings. 'Trade will restart on this route very, very vigorously in the coming weeks and months,' said CMA CGM chief financial officer Ramon Fernandez during a first-quarter earnings call, calling the duty rollback an 'indisputably positive signal for maritime transport.' 'Everyone is expecting trade in June to be much more active than was feared just a few days ago,' said Fernandez. The carrier, which plans to invest $20 billion into the U.S. throughout Trump's presidency, posted a 12.1 percent increase in revenue to $13.3 billion in the first quarter on net income of $1.1 billion. Volumes carried ticked up 4.2 percent to 5.85 million 20-foot equivalent units (TEUs). Additionally, the French shipping conglomerate gave more color on the anticipated U.S. port docking fees on Chinese ships, with Fernandez indicating 'we will organize ourselves in order not to have to pay these fees.' He added that less than half of the company's 670 vessels were built in China. Fernandez said Ocean Alliance partners including China's Cosco Shipping and would adapt to the fees, although he did not say what the wider impact would be to the vessel-sharing agreement. CMA CGM has added peak season surcharges on trans-Atlantic trips to the U.S. as the tariff situation remains at an impasse. From June 1, all cargo headed for the U.S. from northern Europe will carry an extra fee of $400 per TEU or $800 per FEU. And from June 15, cargo from Mediterranean ports to the East and Gulf Coast will get a $500 surcharge. Maersk is slapping peak charges on China- and east Asia-originated cargo to U.S. and Canada as well, hitting them with an extra $1,000 per TEU and $2,000 per FEU. 'Given the tighter capacity on the trans-Pacific, ocean carriers are in the driver's seat to push freight rates meaningfully higher,' said Jefferies analysts in a research note Tuesday.
Yahoo
16-04-2025
- Business
- Yahoo
Analyst warns of ‘carnage' on shifts in container shipping
Significant shifts in the container shipping marked by record-breaking capacity and unexpected rate increases are pointing to potential severe near-term disruptions. Capacity from the Far East to North Europe is set to reach an all-time high in mid-April, according to data from analyst Xeneta. This surge surpasses the previous record set during the height of pandemic disruptions in November 2021, when capacity hit 336,800 twenty-foot equivalent units. Simultaneously, average spot rates on this route had increased by 4.8% as of Tuesday, reaching $2,457 per forty-foot equivalent unit. The Mediterranean route has seen an even steeper rise, with rates jumping 6.8% to $3,270 per FEU. 'We are looking at record-breaking container shipping capacity leaving the Far East for North Europe this week, which means carriers know something is boiling,' said Peter Sand, Xeneta's chief analyst, in a research note. 'This suggests a nervous market, but the demand must also be there to put upward pressure on rates.' The unusual combination of increased capacity and rising rates during what is typically a slack period has led to speculation about the influence of tariffs on trade flows. Sand suggests that shippers may be redirecting goods from the Far East to Europe instead of the United States, where tariffs on some Chinese imports have reached 245%. While the Far East to Europe routes are seeing increases, other major trade lanes show different trends: Far East to U.S. East Coast rates remain steady at $3,951 per FEU. Far East to U.S. West Coast rates hold at $2,910 per FEU. North Europe to U.S. East Coast rates are unchanged at $2,158 per FEU. Year to date, all fronthaul trades have seen significant rate decreases, ranging from 20% for North Europe to U.S. East Coast to 50% for Far East to U.S. West Coast. That comes as carriers announce general rate increases and surcharges in an effort to shore up prices. Adding to the complex market dynamics is port congestion in North Europe. Antwerp in Belgium, Le Havre in France, London Gateway and Germany's Hamburg are experiencing heavy congestion due to various factors including weather, crane maintenance and labor unrest. Sand warns of potential 'carnage' when the record capacity from the Far East arrives in North Europe, given the average transit time of 55 days. 'As we saw in 2021, congestion is toxic for ocean container shipping and can quickly spread across global supply chains.' Find more articles by Stuart Chirls considering making port fees more affordable for Chinese ships: Report 'Tariff shockwave' leads to collapse in ocean container bookings Early container rush ahead as Asia-Pacific defies global growth slowdown Port of Seattle appeals housing plan it says threatens trucking, cargo movement The post Analyst warns of 'carnage' on shifts in container shipping appeared first on FreightWaves.
