Blank sailings soften drop in container spot rates

A surge in blank sailings has helped limit the decline in container freight rates amid weakening demand due to tariff uncertainty, with the market forecast to remain volatile in the coming period.

Container shipping (Photo: Phaata)

Spot container freight rates continued their downward trend this week, as tariff uncertainty continued to weigh on the trans-Pacific market and demand in other regions failed to absorb excess supply.

However, a rising number of blank sailings helped limit the weekly decline to single digits.

Shipping analyst John McCown noted in a report this month: "the very early signs point to the industry having already blanked 81 sailings for April in the transpacific tradelane, well above the 51 sailings blanked during the monthly height of the pandemic."

According to Drewry’s World Container Index (WCI) this week, rates from Shanghai to Los Angeles fell 2% to end the week at $2,617 per 40-foot container, while Shanghai-New York fell 3% to $3,611 per 40-foot container.

Rates have fallen for two consecutive weeks on both routes, following gains in the first two weeks of April thanks to successful implementation of general rate increases (GRIs).

However, it is also worth noting that eastbound traffic from Asia to the US remained strong in March, with imports at the 10 largest US container ports up 11.2% year-on-year, according to data released by Mr McCown.

However, he warned that the twin threats of new tariffs and port charges proposed by the Office of the US Trade Representative (USTR) on Chinese-built vessels and Chinese carriers could reverse this growth.

“Growth in 2025 will be well off the 2024 pace. In fact, if the tariffs and USTR ship fees in place now continue, my view is that it is almost certain there will be a double-digit percent reduction in annual volume for all of 2025, compared with 2024,” said McCown.

On the Asia-Europe trade, WCI recorded a 1% week-on-week decline on the Shanghai-Rotterdam trade, ending the week at $2,312 per 40-foot container, while the Shanghai-Genoa trade remained flat at $3,012 per 40-foot container.

Besides, the Shanghai Containerized Freight Index (SCFI) – which tracks rates quoted this week and often provides an indication of next week’s price trends – suggests that rates on the trans-Pacific trades from Asia to the US West and East Coasts are holding steady, while Asia-Europe trades could see further modest declines.

The Shanghai-North Europe SCFI trade fell 4% week-on-week to $2,520 per 40-foot container, while the Shanghai-Mediterranean trade fell 1.5% to $4,258 per 40-foot container.

Meanwhile, trans-Atlantic rates remained steady, as they have been throughout the month, with the WCI Rotterdam-New York trade down 1% to $2,109 per 40-foot container, while the return trade rose 1% to $825 per 40-foot container.

The relative stability of the route has prompted carriers to announce the introduction of peak season surcharges (PSS) next month, likely in anticipation of increased demand ahead of the new tariffs.

Hapag-Lloyd said today it will impose PSS of $600 per 20-foot container (TEU) and $900 per 40-foot container on shipments to Mexico and Canada from May 15, and to the US from May 25.

Similarly, CMA CGM plans to impose PSS of $400 per TEU and $800 per 40-foot on all shipments from Northern Europe to North America from May 15.

Whether these price increases are sustained will be a key indicator of demand over the next four weeks.

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