Freight Market Update

COVID-19 Update

Container spot rates from Asia to the US soared this week as the aggressive blank sailing programs of transpacific carriers resulted in a capacity crunch and container rollovers.

Maersk expects to cancel 140 sailings in the second quarter after issuing 90 blank sailings (a 3.5% drop in capacity) earlier this year, the carrier said in its first-quarter report released this month. The void trips are a way for the carrier to cut costs as demand for ocean freight falls due to lockdown measures stemming from the coronavirus pandemic. Maersk expects demand to fall 20% to 25% in the second quarter across all its businesses, it said in the report.

In March 2020, the latest month for which after-the-fact numbers are available, U.S. container ports handled 1.37 million TEUs less, a 9.1% decrease from the previous month, 14.8% lower year-over-year, and the lowest volumes since March 2016.

Airfreight rates out of Asia Pacific appear to have peaked, with prices from Shanghai to Europe and North America both declining last week. The latest figures from TAC Index show that after seven weeks of rapid increases, rates from Shanghai to North America last week declined by 11.7%. Prices from Shanghai are far above the levels achieved last year. From Hong Kong, rates to North America increased 20.2% week on week. Looking ahead, derivatives broker Freight Investor Services said the outlook remains uncertain with several factors likely to play a role in how the market progresses.