Container Freight Rates Stabilizing; Drewry says spot freight rates in transatlantic and Asia-Europe head towards stability in the coming weeks

While container spot rates on the Asia-Europe and Asia-North America trades continued to remain elevated, year on year, due to the Red Sea crisis, collapsing rates on other trades continue to dent carriers’ earnings outlook.

Cosco-owned OOCL today 12 April reported its operational update for first quarter, which showed that despite the nascent recovery in pricing since Yemen’s Houthi rebels began attacking commercial shipping, trades that remain unaffected by Cape of Good Hope diversions continue to show considerable weakness.

The Hong Kong-headquartered carrier said Q1 revenues decreased 9% year on year, to $1.98bn, and average revenue per teu decreased 12%, while liftings increased 3.4% and its loadable capacity increased 2.2%.

There was a huge variation across its four main trades – transpacific, Asia-Europe, transatlantic and intra-Asia, which remains its largest trade in terms of volume. Q1 liftings were flat on the transpacific, at 450,000 teu, and down 7.5% on Asia-Europe, to 360,000 teu.

However, total revenues for these trades grew 13% and 0.8% respectively, indicating the January surge in freight rates as vessel diversions and pre-Chinese New Year demand pushed rates up.

Meanwhile, despite an 11.3% increase in volumes on intra-Asia/Oceania routes, to 863,000 teu, OOCL saw a 17.4% decline in revenue, and the situation was even worse on the transatlantic, where a 2.1% growth in volumes was accompanied by a 50.6% decline in revenue.

However, this week’s spot freight data from may give transatlantic carriers grounds for cautious optimism: the Xeneta XSI index recording a 3% increase in westbound spot rates, to $1,993 per 40ft; while Drewry’s WCI has the trade declining by 1%, to $2,244.

“Drewry expects a minor decrease in transpacific spot freight rates, whereas transatlantic and Asia-Europe head towards stability in the coming weeks,” the UK-based analyst said in its weekly pricing report.