International Maritime

Asia – Europe carriers in control as cargo contracts close

By Greg Knowler

according to Platts , a sister product of the Journal of Commerce within S & P Global . Asia – East Coast rates of $ 6,000 were down 7 % from the previous week .

Customers also have access to discounts provided by so-called “ bullet ” rates , which are special commodity- or trade lane-specific rates that are lower than the posted spot rates and freight-all-kinds ( FAK ) rates paid by forwarders .

“ The promotional rates are starting to proliferate ,” said Kurt McElroy , executive vice president of the forwarder Kerry Apex . Bookings for shipments into February have peaked and will only decline further , he said , adding special rates to the West Coast are in the low $ 4,000s .

An industry consultant , who did not want to be identified , said that the fact that some carriers are extending current spot rates into mid-February indicates the drop in demand is accelerating . And that means some customers may choose to delay bookings of non-essential merchandise to see if spot rates decline further during the factory closures in Asia , the source said .

Now that the International Longshoremen ’ s Association has reached a tentative contract agreement with East and Gulf coast port employers , averting a second strike , shippers are focusing primarily on what the tariff policy of President Donald Trump will be after he takes office Jan . 20 .

If tariffs are staggered into the spring and summer , the eastbound trans-Pacific will experience a “ massive frontloading ” of imports , McElroy said .

Long-term Asia – North Europe rates signed in the previous three months were up 52 % year over year in early January . Shutterstock . com

Shippers moving goods from Asia to Europe have begun locking in annual contracts as the capacity-constrained trade lane will likely remain firmly in favor of ocean carriers through the traditional post-Lunar New Year slowdown .

Short-term rates have hovered near $ 5,000 per FEU on the Asia-North Europe lane since mid-December , according to pricing indices , because healthy demand and ongoing diversions around southern Africa absorb significant amounts of capacity — which analysts and carriers estimate at more than 10 %.

With little expectation of any return to Suez transits this year , and with pressure mounting to set 2025 production plans with factories in Asia , Asia-Europe shippers are agreeing to annual contracts .

“ We know that shippers have monitored and analyzed the market closely throughout last year , postponing the signing of new contracts as much as possible , but at some point , you must strike ,” Peter Sand , chief analyst for rate benchmarking platform Xeneta , told the Journal of Commerce in early January . “ It seems to be the case that many shippers have moved forward with their tendering processes amidst the turbulent market as no massive postponement has taken place .”

At the time , long-term rates signed in the previous three email : bill . mongelluzzo @ spglobal . com

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