Asia-Europe spot rates head for $20,000 per feu as new China Covid crisis bites



Ocean carriers are rolling out more rate increases next week, with FAK rates from Asia to North Europe edging towards $20,000 per 40ft.


This represents an incredible 1,000% increase on the spot rate for the trade a year ago.


Meanwhile, transpacific carriers are hitting Asia to US shippers on 15 June, with GRIs of up to $3,000 per 40ft, with some carriers now asking $17,000 per 40ft for US east coast ports.


And transatlantic shippers are also feeling the pain of rate hike contagion with week-on-week hefty increases: this week’s Freightos Baltic Index (FBX) North Europe to US component jumped 17%, to $5,069 per 40ft.


The FBX reading this week for Asia to North Europe climbed a further 5%, to $10,998 per 40ft, however most of the limited availability carrier rate offers seen by The Loadstar this week for UK delivery were around $16,000 per 40ft.


One UK-based NVOCC told The Loadstar this morning the “silly rates” were resulting in many cancelled orders from China, explaining: “This is having a major impact on retailers who cannot shift stock at increased retail prices.”


Andy Cliff of Warrington-based Straightforward Consultancy, warned that some importers, caught in a trap between fixed prices agreed with major retailers and highly elevated freight rates, could be in trouble.


“Many UK importers will find themselves trapped, paying eight times more for freight than last year; so expect insolvencies in 2022,” he warned.


Another UK forwarder told The Loadstar that the market was “bedlam”. He added: “Our import customers are coming to a standstill, and smaller importers like garden centre businesses are going to go out of business.


“Also we are hearing importers are looking to switch production back to Europe, and we are seeing vessel space issues and rate increases on all export trades from the UK.


“We ship about 150 reefers a week and finding space with blank sailings is a real challenge, although MSC and Maersk have been very supportive on exports,” he added.


On the transpacific, the FBX reading for the US west coast was up by 10% this week, to $6,106 per 40ft, while for the east coast the index surged by 16%, to $8,716 per 40ft.


Like the Asia-Europe trade, shippers on the transpacific can only aspire to obtain these rates on the short-term market with carriers having no difficulty in filling any available slots at double the spot rate from a queue of BCOs and NVOCCs desperate to get product to the booming US market.