Cover Story
Heating up down south
China-ECSA spot rates climb amid bullish market
By Laura Robb
Shippers moving cargo from Asia to the East Coast of South America had to deal with peak season delays and a doubling of container spot rates in early June amid equipment imbalances and congestion at major destination ports. The shift of some capacity to Asia – US trades to meet surging demand there contributed to tighter vessel space in the East Coast South America market, forwarders told the Journal of Commerce.
Congestion at the Brazilian ports of Itapoa, Santos, Rio Grande and Pecem and at Buenos Aires, Argentina, soaked up newly deployed tonnage, pushing eastbound spot rates as high as $ 4,740 per FEU in the first week of June, up from just $ 1,400 per FEU in the first two weeks of May, according to Platts, a sister product of the Journal of Commerce within S & P Global.
Marcelo Machado, a freight forwarder at CSS Logistics in Brazil, said vessel slots for the first half of June were bought quickly as blank sailings exacerbated an already significant capacity reduction.
“ Blank sailings had a great deal to do with the situation,” said Machado.“ There was a lot of demand, and carriers had to redirect vessels to the US.”
Container lines are seeking peak season surcharges( PSSs) on contract rates valid for more than 90 days. CMA CGM on May 30 said it would impose a $ 2,000-per-container PSS on all cargo from Asia to East Coast South America from July 1 until further notice. The carrier said it would introduce another $ 1,000-per-container surcharge on June 7, followed by a third PSS of $ 2,000 per container on June 22.
“ Spot rates have been going up week by week,” Mauricio Fisch, director of Brazil-based logistics firm Ocean Express, told the Journal of Commerce in early June.
Average short-term Asia – East Coast South America pricing receded to $ 3,700 per FEU in the week of June 20, according to Platts.
Guido Vermeulen-Perdaen / Shutterstock. com
Equipment, congestion issues
With the Asia – East Coast South America peak season in full swing, rate increases rose further due to equipment scarcity and congestion at key Brazilian ports, which experienced“ slightly disrupted operations,” according to forwarder Kuehne + Nagle’ s( K + N) SeaExplorer platform.
Buenos Aires saw berthing delays of one to three days in the first week of June due to congestion, while Rio Grande, Itapoa, Santos and Pecem had average vessel waiting times of about two to three days, said K + N.
Forwarders said congestion had been getting worse since January, when an ongoing strike by Brazilian customs workers began.
“ The customs [ workers ] are intensifying the strike and won’ t [ serve ] any activities other than priority shipments that are time-critical,” said a Brazil-based forwarder who asked not to be identified.
Forwarders also reported equipment issues, noting a lack of volumes from
Zim Integrated Shipping Services across all Brazilian ports and Cosco Shipping lacking at Rio de Janeiro. Zim and Cosco declined to comment.
Another forwarder said carriers prioritize more lucrative spot market shipments over contracted cargo,“ causing a lot of cargo to roll or miss equipment availability, leading to delays and forcing [ later ] bookings [ at ] higher rates.”
Capacity management
Forwarders said carriers aggressively managed capacity, driven partly by volatile North American demand. HMM canceled several calls on its Far East – India – East Latin America service due to vessels being redeployed on the Asia – US trade, Fisch said.
Still, container lines are expected to deploy an average of roughly 272,000 TEUs between Asia and East Coast South America in June, July and August, a 28.7 % increase from the same three-month period last year, according to data from visibility provider eeSea that accounts for blank sailings.
While most carriers increased capacity on direct services quarter over quarter, Hapag-Lloyd and Cosco were outliers, removing approximately one-third and one-fifth of capacity, respectively, in the second quarter compared with the first quarter, according to MDS Transmodal.
A similar dynamic has also played out on the Asia – West Coast South America trade; average spot rates spiked to $ 5,800 per FEU in the week of June 20, up from $ 1,280 per FEU just six weeks prior, according to Platts.
CMA CGM said it would impose two PSSs in June for cargo from Asia to West Coast South America, Central America and the Caribbean— $ 1,000 per FEU on June 7 and $ 2,000 per FEU on June 22.
email: laura. robb @ spglobal. com email: keithwallis @ hotmail. com
14 Journal of Commerce | July 7, 2025 www. joc. com