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Holidays no longer the charm for high chartering rates

It is now a litmus test for big carriers’ treatment towards cargo owners

Chartering rates were brutal in the last few months stemming from port congestions, empty vessels at the wrong locations, plus shippers fighting for space to ensure their cargoes arrive in time for the holidays. Now that the festive chaos are settling, it is an invitation to carriers to re-examine their business models.

Another opportunity for smaller vessels
Platts reported rates for North Asia-to-North America routes remained stagnant as at 11 February 2022. The all-inclusive premium rates for the Southeast Asia-North America trade lane inched lower during the same ending amidst the holiday slowdown. The all-inclusive premium rates on the Southeast Asia-to-East Coast North America trade route were said to be at US$16,000-US$20,000/FEU, lower than a week ago. For West Coast, the rates remained in the US$13,000 – US$17,000/FEU range, largely unchanged from last week.

A source from Singapore disclosed, “I recently heard that a booking was made at US$12,000/FEU for Singapore to Savannah. This is way lower than the market rate, but it is very rare too. It was offered probably due to empty space that desperately needed to be filled. Otherwise, this rate is unrealistic for the current situation.” Another carrier from India added, “The rates are expected to stay strong throughout 2022 due to firm demand from the US and congestion issues at major ports. I do not see any respite in the situation anytime in Q3 or Q4 2022.”

The strength in volumes to the US worsened equipment availability in other regions, as not only do the carriers divert capacity from short-haul routes, but they have also started procuring the small and feeder vessels for the long haul, especially Asia-Europe, an Indian forwarder said. He added that rates from India to the US have risen by nearly 40 per cent in one month to $14,000/FEU now, and even for India-Middle East, the sentiment is turning bullish, with a price hike expected in coming days.” So why not China?

Cargo owners are now refusing to be held hostage (again) because of the holidays. Some liners have tried to implement premiums post-Lunar New Year, but that just has not stuck, there’s still availability in March so that’s probably why,” a source revealed. If smaller vessels are feasible options, they can be equally effective.

Marine Online News Team
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