Container Forward Rates Nosedive Amid Signs of Peak Season Ending Early
Rates from Asia to US Fall Sharply
Sharp Decline in Spot Rates Triggers Repricing in Forward Freight Market
Spot rates from Asia to the US West Coast have fallen sharply, leading to a significant repricing in the forward freight market. Rates from Shanghai to Los Angeles have dropped by 20% from their peak in August, according to Freightos Data.
The Wall Street Journal reports that the 2023 peak season appears to have arrived early and ended quickly, with volumes decreasing at major US ports. This decline in demand has led to a steep decline in spot rates.
However, port congestion and spiking ocean rates to other hubs, such as Jebel Ali, continue to affect the market. Spot rates from Shanghai to Jebel Ali remain elevated, but they have also started to soften in recent weeks.
Carriers are expected to implement a Peak Season Surcharge on June 1st, but freight forwarders believe that the rate hikes will be difficult to maintain in the short term due to the weakening demand in the spot market.
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