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Home » U.S. import box rates continue fall despite solid U.S. traffic flows
Forward Thinking

U.S. import box rates continue fall despite solid U.S. traffic flows

October 16, 2017
Supply Chain Quarterly Staff
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Container shipping rates into the U.S. are on a downward spiral even as volumes into U.S. port gateways remain solid, a sign that vessel overcapacity is trumping stronger demand and the impact of carrier alliances designed to rationalize ship space, according to data released by Freightos, a Hong Kong-based online quote portal.

Weekly spot, or non-contract, rates for 40-foot equivalent unit (FEU) containers from China to the U.S. East Coast fell 5 percent week over week—and 17 percent year over year—to $2,017 per FEU. Rates from China to the U.S. West Coast dropped 1 percent week over week—and 15 percent year over year—to $1,450 per FEU. Rates from Europe to the East Coast fell to $1,133 per FEU, down 12 percent week over week and 19 percent year over year.

The year-over-year rate data was skewed by the sudden August 2016 collapse of Korean liner Hanjin Shipping Co., at the time the world's seventh-largest container line. Hanjin's abrupt exit took out 3 percent of global container capacity, sending spot rates soaring and keeping them elevated for the rest of 2016. Rates last October were about 15 percent higher than they are today, according to Freightos estimates.

Still, prices have been declining nearly across Freightos' index board since they peaked between mid-January and early February. Rates on the China-U.S. East Coast trade lane have fallen for seven consecutive weeks. Export prices from China have declined for eight consecutive weeks, with the exception of eastbound rates into the U.S. during the first week of September and the first week of October.

The continuing fall in box rates comes as container lines enter what is traditionally the busiest period of the holiday shipping season. At what should be a peak of the pricing cycle, seven key trade lanes are tracking below their high points for the year, according to Freightos data. These include China to the U.S. West Coast at 70 percent, China to the U.S. East Coast at 56 percent, and Europe to the U.S. East Coast at 73 percent, Freightos said.

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