Source: Market average rates for 40‘ containers according to www.xeneta.com
Trade Analysis: Transpacific
Situation
The situation has improved lately on both the East and West Coast, with vessel dwell time decreasing week by week due to declining demand. The number of vessels in queue in Los Angeles is at zero, with berth-on-arrival conditions. Vessel dwell time at the port of New York has dropped to 0-2 days while vessel dwell time in Norfolk has improved to under 1.5 days. Savannah’s berth congestion is improving, with dwell time down to 2 days. In Houston, vessel dwell time has decreased to 2-3 days, with several vessels taking advantage of a new virtual marker system.
Handling time at rail terminals in ports is at 2-4 days, which is close to standard delivery times. There are still some congestions at container yards, but overall the situation is improving and expected to normalize.
Obstacles
Market volumes have dipped by 22% year-on-year, and carriers are still unable to determine long-term rate trends. Nonetheless, carriers are still optimistic that they will be able to lock in rates at better levels than they are currently. Prices are under pressure and will remain so unless the demand situation recovers. The demand forecast seems to remain weak until Q2, even though certain industries are showing a positive trend.
Outlook/Solutions
Volumes to the USA are still in decline and demand is still not meeting supply. Currently, carriers are following the market as long-term rates appear to be uncertain. Carriers continue to maintain rates of USD 2,000/40 to the West Coast and USD 3,000/40 to the East Coast. IPI rates are approaching pre-COVID-19 levels.
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