United States shippers are reportedly resisting carrier moves to restore rates on the trans-Pacific (Asia-North America) tradelane, given a largely unchanged overcapacity situation in global container shipping.
With the most influential shippers in the tradelane currently paying eastbound 40-foot container rates of US$750 to the West Coast and US$1400 to the East Coast, carriers are understood to be seeking respective increases to US$1500 and US$2800.
However, overseas commentators have observed that unless the pace of vessel scrapping significantly ramps up, “the fundamental truth is that the vessels are still there”, thereby maintaining the shippers’ upper hand.
It has also been noted that carriers continue to be their own worst enemies, as evidenced in the aftermath of Hanjin Shipping’s demise, whereby increased capacity was promptly deployed in the busiest eastbound Pacific routes. Despite Hanjin providing about 7% of capacity in the tradelane, its demise consequently caused “hardly a blip” in freight rates.
However, it is not all plain sailing for shippers, with expected further carrier failures and overall consolidation lessening options. This has had the impact of prompting shippers to ensure alignment with carriers that suit their networks and are stable/have secure partners, as well as deliberately forging new carrier relationships in order to mitigate risk.