What percentage of these GRIs stick is perhaps not as important to the lines as starting to shift the balance of power back in their favour, thus prompting a change in the sentiment of shippers at new-contract negotiating tables.
Indeed, one UK-based carrier contact recently told they were extending some current deals into January, rather than sit down with customers to discuss new deals.
“They [shippers] are very much on the front foot at the moment, and we are not even allowed to discuss new rates they are looking for next year,” he said.
On Friday. CMA CGM and Hapag-Lloyd followed MSC’s Asia-North Europe $2,050 per 40ft FAK (freight all kinds) new rate for 15 December with their own $2,000 and $2,200 rates, respectively, valid from the same date.
Meanwhile, for the Asia-Mediterranean tradelane, MSC’s new $2,450 per 40ft FAK rate, from 15 December for west-Med ports, was countered by Hapag-Lloyd’s $2,400 and CMA CGM’s $2,600. Rates which contrast with last week’s spot indices, which averaged $1,225 for North Europe and $1,430 for west-Med destinations.
It’s too early to assess any lasting reaction in the market to the new wave of price hikes, but today’s Ningbo Containerized Freight Index (NCFI) suggests the carrier message could be getting through, noting: “Freight rates on the Europe and Mediterranean routes have increased sharply.”
In the US, there are some early signs that consumers have been opening their wallets over the Thanksgiving holiday. According to Adobe data, Americans spent $5.6bn on Thanksgiving Day itself, 5.5% more than last year, on a wide range of ‘non-essential’ goods, of which around $3.3bn was spent online.
This potentially bodes well for transpacific carriers, if the holiday season purchasing continues, enabling retailers to clear inventory backlogs, and it could be a confidence boost that will trigger new purchase orders.
Commenting on the conundrum for BCOs (beneficial cargo owners) in the US, consultant Jon Monroe said 2024 forecasts would depend on the success of retail sales during the holiday season.
“Expect retailers to be cautious about their ordering until they get a grip on their holiday sales performance,” he said.
And, on freight rates, Mr Monroe said “no one wins with cheap rates” – ie, when carriers discount rates to below cost.
“Forwarders are feeling the heat on today’s low rates,” he explained. “When rates are at or above $2,000 to the US west coast there is a sliver of margin to be made.”
Of note, last week’s Freightos Baltic Index (FBX) Asia to US west coast component declined a further 8%, to $1,573 per 40ft.
