SIMIC

There seems to be nothing ocean carriers can do - or are prepared to do - to stop the rapid slide of container spot rates this side of the Chinese New Year, according to London's Loadstar.

If the rate erosion on the tradelane continues at this pace, spot rates recorded by the WCI will be below $750 a TEU by Christmas.

However, notwithstanding that the WCI's spot rate has dipped below the watershed $2,000 level, The Loadstar has received unsolicited rates last week from a China-based forwarder of $1,000 per FEU for prompt shipment from all main ports in China to the UK ports of Felixstowe, Southampton and London Gateway.

According to Vespucci Maritime CEO Lars Jensen, the liner market is officially experiencing "a hard landing", with the only light at the end of the tunnel that of the early Chinese New Year on January 22.

"The present course for the market is for spot rates to reach the bottom after the Chinese New Year," said Mr Jensen.

The consultant said that, providing the global recession was mild and an inventory correction was the main driver behind the demand collapse, then there could be a cargo surge next summer, leading to a new spot rate spike.

But if the recession turns out to be deeper and more prolonged, Mr Jensen sees a scenario where demand next year is subdued and a cargo surge only materializing in the lead up to the 2024 Chinese New Year.

"In either case, the collapse will cause a large amount of operational turmoil in the next few months, as carriers will continue to blank a large number of sailings in an effort to halt the slide in spot rates," said Mr Jensen.

Indeed, Maersk's Asia Pacific market newsletter last week describes the slump in container spot rates as "dramatic" and said it was "adjusting" its network "to match the new reality".

Meanwhile, on the transpacific, the Freightos Baltic Index (FBX01) reading for Asia to the US west coast lost 26 per cent of its value last week, to $1,430 per FEU with the spot rate having devalued by half in the past fortnight.

And, on the Atlantic coast, spot rates are playing catch-up, with the FBX03 Asia to the US east coast slumping 18 per cent on the week, to $3,770 per FEU.

Nevertheless, after US consumers spent a record $9.12 billion online during Black Friday this year, retail inventories will need replenishing, and fresh orders could give a boost to bookings for transpacific carriers, as well as halting the fall in spot rates.

"Despite the gloom, there are signs of buoyancy in some retail sectors in the US," said Maersk.

On the transatlantic outlier tradelane, the introduction of new services and upgraded tonnage on the North Europe to US east coast headhaul route has yet to have an impact on the spot indices, with Xeneta's XSI component just edging down 1 per cent on the week, to $7,288 per FEU.