Transpacific ocean cargo rates remain stable…for now

Though given the increase in capacity on the trade compared with a year ago, the stability in spot rates may not prove sustainable.

By ·

The Drewry Hong Kong-Los Angeles container rate benchmark, published in the latest Container Freight Rate Insight report, jumped 14% to $2,524 per forty-foot equivalent unit (FEU) this week, as the January peak season surcharge (PSS) took effect.



The $311 per 40ft increase in the benchmark rate shows that Transpacific Stabilization Agreement (TSA) member carriers’ achieved around 50% of their intended $600 PSS price increase target. 



“Cargo demand and carrier load factors have strengthened in the run up to Chinese New Year,” said Martin Dixon, Drewry’s research manager for freight rate benchmarking. “The wild card remains the threat of strike action at U.S. East Coast and Gulf Coast ports which is also serving to strengthen rates.”



Zepol Corporation, a leading trade intelligence company, recently noted that The Ports of Los Angeles and Long Beach are the busiest ports in the country and both have posted slight decreases from 2011 by 0.7% and 2.3%.

The latest price increase brought Drewry’s Hong Kong-Los Angeles container rate benchmark back to the same level it was at in October, but the index remains 12% off last year’s peak reached in August. 


The transpacific has proved more resilient than the Asia-Europe trade to the overcapacity plaguing the industry. Drewry’s Transpacific Eastbound Freight Rate Index, a weighted average of freight rates across multiple trades between Far East Asia and North America, climbed 8% in December compared with the previous month, to reach $3,357 per FEU. It now stands just 2% off last year’s high reached in September 2012. 



Though given the increase in capacity on the trade compared with a year ago, the stability in spot rates may not prove sustainable.

“The US East Coast and Gulf Coast strike threat notwithstanding, we expect spot rates to soften following Chinese New Year,” added Dixon. “However, we caution that shippers should expect some increase in their 2012-13 contract rates on the eastbound transpacific, given the stronger state of the market compared to last year.”

Dixon is among the panel of industry experts scheduled to speak at LM’s upcoming “Rate Forecast” webinar on January 31.


About the Author

Patrick Burnson, Executive Editor
Patrick Burnson is executive editor for Logistics Management and Supply Chain Management Review magazines and web sites. Patrick is a widely-published writer and editor who has spent most of his career covering international trade, global logistics, and supply chain management. He lives and works in San Francisco, providing readers with a Pacific Rim perspective on industry trends and forecasts. You can reach him directly at [email protected]

Subscribe to Logistics Management Magazine!

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your entire logistics operation.
Start your FREE subscription today!

Article Topics

Ocean Cargo · Ocean Freight · Trade · All Topics
Latest Whitepaper
B2B Sellers Prefer a Unified Approach for Ecommerce
A new study from Forrester Consulting, commissioned by NetSuite, found that many midmarket, B2B sellers say their ecommerce solutions have contributed to their growth in sales, new customer acquisitions and improved customer relationships.
Download Today!
From the August 2016 Issue
A growing number of low-cost lift trucks offer new avenues for pairing equipment and applications, but less cautious buyers might find that small up-front costs come at a steep price. Selecting the proper lift truck, lift truck tips 2016, Choosing the right Lift Truck
Megatrends in ocean freight
Ocean Cargo Roundtable: What’s in store for 2017?
View More From this Issue
Subscribe to Our Email Newsletter
Sign up today to receive our FREE, weekly email newsletter!
Latest Webcast
Getting the most out of your 3PL relationship
Join Evan Armstrong, president of Armstrong & Associates, as he explains how creating a balanced portfolio of "Top 50" global and domestic partners can maximize efficiency and mitigate risk.
Register Today!
EDITORS' PICKS
2016 Quest for Quality: Winners Take the Spotlight
Which carriers, third-party logistics providers and U.S. ports have crossed the service-excellence...
Regional ports concentrate on growth and connectivity
With the Panama Canal expansion complete, ocean cargo gateways in the Caribbean are investing to...

Digital Reality Check
Just how close are we to the ideal digital supply network? Not as close as we might like to think....
Top 25 ports: West Coast continues to dominate
The Panama Canal expansion is set for late June and may soon be attracting more inbound vessel calls...