Our recent updates on April rates have yet again been spot on with regards to predictions. The crash of April's rate and 'offerings' in the market has been short-lived, whilst a few carriers along with Forwarders too, have gone fishing for a quick win of new business prior to a rate increase.
Shipping Lines have announced a rate increase to restore levels back to where they were for the beginning of April. So an increase of approximately $150 per TEU.
How long will it last?
Good question. There are two sides to this guess;
1) Is there enough cargo being booked for the number of vessels now in circulation? Probably not, although a few lines are now hinting they are becoming full. We will see.
2) Can Shipping Lines survive with the rate being at such a low level? Probably not for too long. Some lines have joined forced which gives a little more financial stability or for want of another word, longer to survive whilst consistently taking losses! Other lines have joined new networks to share vessel space whilst others have simply invested in their own new larger vessels to compete with the new competition.
So our thoughts (don't hold us to it!) is that rates may soften once again this month before climbing up once again for June 1st and this could be repeated until all lines cannot suffer the losses anymore. They will not want to be the next Hanjin and it's important for us as Forwarders to be looking out for any alarming signs, although cheap rates are often tempting, it's not always the best option over reliability and service.
New rates will once again be sent out by Friday or Monday latest.
Whilst we wouldn't be surprised if lines stay strong and hold rates until the 31st as they should, we are slightly more confident a reduction could find it's way through mid-month.
Please feel free to drop us a line to ask us about rates/forecasts.