Backed against a wall of deep losses and weak demand but emboldened by a doubling of spot rates since mid-2016, container lines are warning trans-Pacific shippers of significantly higher spot and contract rates next year. Shippers, however, aren’t convinced the fundamental drivers around pricing have changed, setting the stage for fierce negotiations, the result of which could determine which carriers stay afloat in coming years.
Container lines are seeking eastbound rates of at least $1,500 per 40-foot container to the West Coast and $2,800 per forty-foot-equivalent unit to the East Coast, according to analysts and liner executives. The largest beneficial cargo owners this past year have been paying rates of about $750 per FEU to the West Coast and as low as $1,400 per FEU to the East Coast. That compares with rates earlier in the decade of about $2,000 per FEU to the West Coast and $3,000 per FEU on all-water services to the East Coast.
