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Disruption keeps Asia-Med container rates steady

Xeneta reported that container freight rates on the Far East-Mediterranean trade have been flat this year, supported by disruption in other trades.

Rates have held at around $14,000 per feu on the spot market, a level seen since late September 2021, and $9,000 per feu for longer-term contracts.

While Asia-Med rates have held steady, rates from Asia-North Europe have softened in the first few months of 2022, eroding a premium the route held over Asia-Med in the second half of 2021.

“In the second half of 2021, spot rates to North Europe from the Far East were on average $860 per feu higher than those to the Mediterranean, while long term rates were $1,350 per feu higher. In the first two and a half months of 2022, the gap between the two has again fallen, and on the spot market… leaving them cheaper than the shorter journey to the main Mediterranean ports and hubs,” said Peter Sand, Chief Analyst at Xeneta.

The shrinking gap between the two trades will make Mediterranean ports less attractive to shippers looking to save money by routing cargo to Northern Europe on cheaper Med services.  “Switching to importing through Mediterranean ports instead of sailing further North will not offer any substantial discount on freight rates for shippers,” said Sand.

Xeneta said that rates were supported by disruptions to the sector rather than volume growth, and that the recent COVID lockdowns in China threaten to upset the balance seen in recent months.

“Despite the softening in spot rates to North Europe in March, the latest COVID lockdown in southern China may leave both shippers and carriers again having to find solutions to new problems quickly. Should the situation deteriorate further, it may stop the current trend of softening spot rates,” said Sand.

TAGS: Europe Asia