Freight rates are stable as carriers find a balance between supply and demand

Only six more blanked sailings in the past week have marked the stability of long-haul routes that are currently in need of balancing with available shipping capacity, suggesting that freight rates are gradually coming in stability.

Freightos Baltic freight rate volatility index last week showed a slight increase of 35 USD / FEU in the first week of May, reaching 1,441 USD at the end of the week. For headhaul on the Pacific route, a sharp increase of 110 USD / FEU over the same period was reached 1,645 USD / TEU, the highest level since September last year.

For backhaul on the Pacific, freight rates fell to their lowest level in more than a year in mid-March, dropping to $ 353 / FEU, but later recovered to $ 467 / FEU. Meanwhile, freight rates to Asia from the Mediterranean in mid-April stood at 942 USD / FEU and then dropped to 911 USD / FEU in the first week of May.

Sea-Intelligence said in the Sunday Spotlight magazine this week, "There are currently very few sailings being blanked by shipping lines, and at this point the carriers are satisfied with the cancellation program deemed sufficient to reinforce the level freight rates".

The Maritime Strategy International (MSI) believes that the shipping industry has been "in the eye of the storm" for the past month. However, the shock of China’s production shutdown is now seeing the lines emerging from the Asian downturn.

Container shipping lines "now face the full impact of the international spread of Covid-19. There will be no escaping financial pain this year, but so far it seems damage limitation efforts by liner companies have performed about as well as could have been hoped, "said MSI.

According to the consultants, canceling the sailings will reduce operating costs and maintain freight rates. "In the end, the collapse of fuel oil prices provided much-needed relief (fuel costs typically account for about 15% of a carrier), MSI added.

Phaata (Source Container-News)

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