U.S. East Coast assumes cost of importers' flight from California ports.

Falling spot rates for ocean containers, especially on the Transpacific route, suggest that capacity continues to outstrip demand.?According to the Freightos Baltic Index (FBX), spot rates between Asia and the US West Coast (USWC) fell 2% the previous week to US$7,425/FEU, 31% lower than at the same time in 2021 when rates were starting to rise to complete an 80% rise over the course of the month. Meanwhile, rates for the Asia-US East Coast (USEC) route fell 2% to US$$9,872/FEU, being 29% lower than the same week last year.

Drewry, meanwhile, provides global data through its weekly composite index, which decreased marginally by 0.2% last week and fell 20% from a year ago. In the specific case of the Shanghai - Los Angeles route, rates according to the consultant fell by 1% or US$86 to US$7,566/FEU. Meanwhile, rates for the Shanghai - New York route maintained their value at US$10,154/FEU.

The overall figures show a downward trend and this time the increasing numbers of blank sailings scheduled in May and June by the shipping lines to try to adjust capacity to the drop in demand have been unsuccessful. But the lines appear to have flexed their muscles, as according to FBX there are fewer itinerary cancellations scheduled for late June, suggesting that they are waiting until well into the peak season to fully deploy this weapon.???

An increase in the flow of container ships to the US during the peak season could also pose a challenge, as USEC ports struggle with worsening congestion. This goes hand in hand with falling schedule reliability on the Far East-USEC route, as according to Xeneta in May only 1 in 5 vessels arrived on time, while the other four out of five ships are on average 8.4 days late.

Globally, however, the picture is improving, as schedule reliability rose again to 36% in May after a drop in April, recording an average drop in arrival delays to 6.1 days, its lowest level since April 2021.

Of particular note here was the performance of itineraries on the Far East - East Coast South America (ECSA) route which achieved the highest reliability in May, with 45% of vessels calling just in time. However, the figure represented a drop compared to April, where it stood at 63%.

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