Carriers’ Rates – a wait and see game

A year ago, shippers were desperate to agree annual contract deals with ocean carriers to secure their supply chains, and were prepared to do, and pay, ‘whatever it took’.

And carriers were holding ‘contests’ to determine the most attractive large-volume BCOs to be included in their exclusive customer portfolios.

But 12 months on, the container liner shipping market has seen an 180-degree turn – world economies are being racked by huge hikes in energy costs, high inflation and spiralling interest rates, causing a pause in discretionary spending by consumers and a downturn in demand.

Since the ‘non-event’ peak season in July and August last year – traditionally when carriers garner the most revenue from pre-holiday season orders – container spot rates from Asia have softened, along with demand.

Nevertheless, there is evidence over the past couple of weeks that the spot rate bottom may have been reached on the key Asia-North Europe and Asia to US west coast routes.

By Christmas on the Asia to Europe tradelane, the contract season is normally well under way. This seems to have changed this year as both shippers and carriers delayed the start of negotiations until they see how the market plays out after the Chinese New Year, which commences on 22 January.


“All indicators point towards rate drops, with several of the major Far East trades pointing towards new long-term contracts that are much closer to the current far lower spot rate benchmarks.”