Ocean box rates likely to keep on falling

Despite the so-called peak season just around the corner, ocean freight rates have sunk to a two-year low, down almost 58% year on year after a 9.5% tumble between June and July, according to Oslo-based freight and logistics analyst, Xeneta.

Real-time data, crowd-sources from leading global shippers, indicates that rates are falling on all major trade lanes. Emily Stausbøll, one of the firm’s analysts, does not expect respite any time soon. Record volumes of new and very large ships are scheduled for delivery soon and overcapacity is likely to add further pressure.  

Writing in a Xeneta update, Stausbøll said: “Carriers waiting for higher volumes in July, and in the coming months due to peak season, look increasingly likely to be disappointed. Even if volumes do increase, and whatever happens to demand, overcapacity is now inevitable as these record numbers of new ships being delivered this year will have a wide-reaching effect.”  

The scale of ship deliveries is unprecedented. A record of 40 new ships with a total capacity of more than 300,000 TEU were delivered in June. The took the year’s first half total to 990,000 TEU of ships, with about the same volume due to be commissioned between now and the end of December.

Despite significant falls, trans-Pacific rates have shown the most resilience. But rates on the world’s largest trade lane between the Far East and Europe have fallen dramatically. According to Xeneta estimates, freight for a 40-foot container on the route between Asia and North Europe on August 1st last year would typically have cost USD 9,557. In the last week of July, this had fallen to an average of USD 1,186.