Market Update July 20th

The disconnect between reduced demand and rates continues on the transpacific, with Asia-US west coast rates recorded by the SCFI holding firm, edging up 0.4% on the previous week, but some 70% higher than for the same week a year ago.

For the US east coast, the SCFI ticked up by 1.1% on the week, despite east and Gulf coast ports recording a cumulative year-on-year 12.5% decline in container imports for June. According to the latest monthly statistics compiled by New York-based consultancy Blue Alpha Capital, container imports into the top ten US ports declined by 10.2% in June, compared with the same month of last year.

According to eeSea.com data, while carriers voided 15% of their sailings from Asia to North America during the second quarter of 2020, collectively, carriers have only blanked 5% of third-quarter arrivals, putting considerably less pressure on rates for trans-Pacific shipments. As carriers raised their capacity for end of July shipments, some slight pressure was seen creeping onto the trans-Pacific routes, which declined from recent year-to-date highs. The North Asia-to-East Coast North America and North Asia-to-West Coast North America routes both dipped.

China's worst floods in decades are disrupting port operations in the center of the country and along the east coast, leading to port closures on the Yangtze River and hitting cargo operations at Shanghai and Ningbo. The floods, caused by heavy rains over the last six weeks, have also impacted container operations in southern China where reefer imports have already been disrupted by stringent checks on meat and other perishables due to the coronavirus disease 2019 (COVID-19), the JoC reports.

Cathay Pacific has issued a profit warning - in anticipation of a "substantial loss" for the first half of 2020. The carrier has continued to operate a full freighter schedule as well as charter flights from its freighter operator Air Hon Kong. Cargo-only passenger flights dropped off in June, however. The Indian government has agreed to allow American airlines to resume passenger flights between the two countries from July 23.