Rates for ex-Asian cargo into East Coast South America drop more than 50%

The latest Platts Americas Container Freight Commentary, released on Monday by S&P Global, indicates that ex-Asian cargo bound for the East Coast of South America saw the greatest decline on the week, dropping 51.9%, or $2,700, of its value throughout the week, to settle at $2,500/FEU.

This is the largest drop in the route’s rate since early September and the first time East Coast South American import rates were below Atlantic import rates since July 12.

Market sources said the drop is from soft demand, excess inventory, and government unrest.

“The rates are no longer dropping now, but it’s very uncertain times now,” said a freight forwarding source in Brazil.

Import rates into the Pacific coast of South America also fell 11.6% to rest at $3,000/FEU.

A freight forwarding source in Chile attributed the decline to recently lowered demand, combined with a simultaneous increase in capacity.

United States

In turn, North American import rates to the West Coast slowed their slide during the week ending Nov. 11.

After many carriers decreased capacity in late October through early November, America’s container spot rates on the Pacific Coast seemed to stabilize slightly during the week.

According to Sea Intelligence, 34 additional blank sailings were announced for the Asia-to-West Coast North America route in late October through the first week of November. During that same time, only 16 blank sailings were announced for trans-Atlantic imports.

The capacity reduction tightened the supply for Pacific imports from North Asia, slowing the rate decrease that has plagued the trade since early July. Platts Container Rate 13—North Asia-to-West Coast North America—lost 3.4% to balance at $1,400/FEU on the week, compared with a 12.1% dive during the first week of November.

During the same time, cargoes bound for the East Coast from North Asia saw a 12.5% reduction on the week to settle at $4,200/FEU, a slightly larger drop than the previous week, which shifted the rate down by 9.4%.

Despite the blank sailings and pulled services, market participants said that supply still greatly outweighs demand and East Coast rates will likely continue to fall.

Source: Platts Americas Container Freight Weekly Commentary by S&P Global

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