Freight rates have continued their decline with the slack season now in full swing. The heavy front-loading of holiday season cargo for the US and Europe that have driven up shipping rates since May are now working in reverse but carriers have still not adjusted vessel capacity for the winter season with only limited blank sailings planned in the next 6 weeks. This is clearly seen in the Asia-North Europe, US West Coast and Latin America routes where capacity deployment remains elevated, while the containership charter market also remains red hot.
Demand for additional tonnage shows no signs of cooling down, with carriers snapping up all tonnage coming open on the charter market in the next 2 months. The idle fleet remains unusually low at this time of the year, while scrap sales for the full year remains well short of 100,000 teu as carriers set the stage for a fresh battle for market share ahead of the 2025 alliance reshuffling.
Linerlytica
Carriers’ reluctance to remove surplus capacity bodes poorly for 1 Nov rate hike prospects
Carriers have failed to adjust Asia-North Europe capacity to match the reduction in cargo demand with scheduled capacity from Asia expected to rebound by over 25% in the coming weeks. Apart from selective void sailings, none of the carriers on the Asia-Europe route are planning any winter capacity reductions. This would jeopardize their efforts to arrest the decline in freight rates despite plans to hike rates by $1,000-2,000 per feu on 1 November after the SCFIS have already slipped by 62% since July.
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