Market gradually stabilized during trans-Pacific contract negotiations for new season

Port of New York/Newjersey (Source: NJB magazine)

Major shipping lines have lost half of the gains seen in the early days of the Red Sea crisis, and the market is shifting in favor of shippers in trans-Pacific contract negotiations. , according to the latest report of Baltic Exchange.

In the report, Vespucci Maritime CEO Lars Jensen noted that the pace of rate declines on the trans-Pacific and Asia-Europe routes is slowing, currently indicating possible stabilization occurred in the following month but remained at a level significantly higher than pre-crisis levels, as well as higher than pre-pandemic levels.

The March 26 collapse of the Francis Scott Key Bridge in Baltimore is not expected to affect shipping rates, Jensen said.

"From a US perspective, this only has impacted the northeast as cargo flows are mainly redirected through Norfolk and New York/New Jersey. This leads to a 10% increase in port handling in these two ports, which is within their capacity. As a result, some delays and cost increases might be expected, but nothing disruptive on the ocean side. Inland truck and rail might see slightly more challenges in the northeast of the US, but from a global perspective, this will have no impact at all," explained Jensen. 

Freightos chief research officer Judah Levine noted that the Freightos Baltic global container rate index fell 22% month-over-month to $2,624/FEU as Lunar New Year demand eased and shipping lines The sea has now had time to adjust to longer routes due to continued diversions in the Red Sea, which has reduced pressure on freight rates.

Even so, rates are expected to remain high, with some estimates that rates will remain between 1.5 and 2 times normal levels as long as diversion continues. At the end of March, global freight rates were 102% higher than in 2019.

"Operational improvements for the East Coast included the Panama Canal restrictions easing late in the month, adding back three more daily transits. However, concerns of possible port labour disruptions in October could see some peak season demand pulled forward to earlier in the year," said Levine. 

Source: Phaata.com (According to ContainerNews) 

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