Trans-Pacific Spot Rates Edge Up as Carriers Weigh Capacity Cuts

Spot freight rates from Asia to the US West Coast edged up slightly earlier this month,
according to Platts and Shanghai Shipping Exchange indexes, as container lines face pressure
to cut capacity in response to falling demand or risk losing contracted cargo to the spot market.
The modest increase may signal that blank sailings are beginning to slow the steep rate
declines that started in late May, though the stability could prove temporary.

The run-up to China’s Golden Week holiday on 1 October — when factory production slows —
is viewed as the last major chance this year for carriers to halt rate erosion before shippers shift
contracted allocations to cheaper spot deals.

Sources told the Journal of Commerce that ocean carriers are seeking rate increases of $800 to
$900 per FEU, with one carrier representative noting the goal is to offset losses from the past
two months.

Spot rates from Asia to the US West Coast currently stand at about $2,000 per FEU, according
to various indexes, with the Shanghai Shipping Exchange showing a 65 percent drop since
June.

Bullet rates for single voyages are typically $200 to $300 lower than index levels, while some
forwarder quotes for West Coast routings have fallen as low as $1,300 to $1,400 per FEU.
So far, carriers have been cautious in blanking sailings despite sliding rates and soft year-end
forecasts. But analysts and forwarders warn that a sharper round of capacity cuts is likely.

Carriers’ reluctance stems from concerns over losing volumes already reduced by US tariff
frontloading, the possibility of a late-year rebound in demand, and the continued presence of
smaller niche operators in the trade.