Xeneta Chief Analyst Peter Sand said that long term rates for the US East Coast to Asia were $350 per feu higher than the spot market in mid-march, but long-term rates had since fallen by $250 per feu while the spot market held steady. The long-term premium had therefore fallen to $90 per feu.
The story was similar on the US West Coast, where a $370 per feu drop in long-term rates to Asia since mid-March brought the premium for long-term rates to $90 per feu from $600 per feu.
Looking back a year, short- and long-term West coast rates were the same in April 2021 while spot rates on the US East cost were $180 per feu more expensive than long-term rates.
Comparing the situation now to a year ago, spot rates on both coasts are relatively level year-on-year, while long-term rates are higher despite their recent drop.
“Long term rates signed in the past three months from the US East Coast to the Far East are up 20% from a year ago, with rates from the West Coast up 10.5%,” said Xeneta.
The impact on trade of the COVID pandemic explains some of the changes.
“Since the start of the pandemic, US exports have performed very poorly compared to imports, with record numbers of empty containers being sent back to the Far East. Compared to the first two months of 2019, North American imports from the Far East are up by 31% in January and February this year, while exports to the Far East are down by 19% (source: CTS)”, said Sand. US West Coast exports to Asia are down 2.5% on-year in the first two months of 2021, while East Coast exports are down 19.7%.
“The West Coast exports just under twice as many loaded containers to the Far East compared to the East Coast, with congestion and delays not leading US exporters to shift their coast of choice as has been happening with US importers,” said Sand.
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