Carrier are pushing ahead with transpacific rate hikes in May despite the severe drop in Chinese volumes that has forced carriers to slash Transpacific capacity by over 20% while capacity utilization on the remaining services are down by more than 5%. The reduction in the cargo flow to the US will start to impact arrivals in May, raising the likelihood of an imminent Sino-US trade deal that could trigger a sharp rebound in Chinese cargo bookings to the US. This has helped carriers’ bid to hike transpacific rates in May, and they have also secured agreements with shippers for new Transpacifc service contracts at marginally higher rates than last year.
MSC’s fleet has breached the landmark 6.5m TEU milestone as it extends its lead over Maersk to 2m TEU. The global containership fleet has also surpassed 32m TEU for the first time. The rapid rise in global supply amidst a slowdown in global trade volumes threatens to unravel carriers’ efforts to hold freight rates, with the conclusion of a Sino-US trade deal becoming the key pivot point for the market.
Johnson Leung
Transpacific sailing cancellations pick up
Carriers have slashed the number of Asia to US sailings in week 16 with total departures from Asia falling to 434,000 teu, with further cuts in week 19 to coincide with the May day labour day holidays across Asia. 6 transpacific services have been withdrawn so far since February, with the remaining services operated on a rolling sliding schedule as carriers are reluctant to take out more services on a permanent basis on expectations of a potential rebound in cargo volumes once a Sino-US trade deal is reached.
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