Far East to US container volumes surge 24.1% in January

Recent data from Xeneta’s Weekly Container Rate Update highlights a notable increase in cargo capacity departing the Far East for the US, up by 16.2% compared to the same period last year. This increase is particularly significant on routes to both the US West and East Coasts.

Moreover, volumes from the Far East to the US have seen a substantial rise of 24.1% in January 2024 compared to the previous year. Notably, the Ocean Alliance remains the largest capacity provider on this route, despite experiencing the lowest growth among global alliances.

On the Far East to Europe routes, however, the dynamics differ. While demand has increased by 7.1%, capacity has decreased by 5.3%, with significant drops observed on routes to the Mediterranean and North Europe.

Interestingly, 2M has surpassed the Ocean Alliance as the largest provider of capacity on the Far East to Europe routes. This shift is accompanied by a notable increase in non-alliance capacity, driven primarily by MSC.

Despite challenges such as longer sailings due to the Red Sea situation, carriers have managed to maintain service schedules by introducing more ships. However, this hasn’t necessarily translated into increased weekly capacity for shippers due to longer sailing distances.

For instance, the Ocean Alliance’s MEX1 service to the Mediterranean has experienced a decrease in weekly capacity offered, despite deploying more ships to compensate for longer sailing distances. Similarly, 2M’s Far East to North Europe Silk Service has maintained flat weekly capacity while introducing additional ships to adhere to schedules.

The pressure on capacity, exacerbated by extended sailing distances, may lead carriers to consider surcharges and rate increases. However, market indicators from the Xeneta platform suggest a softening trend since the peak in January, with early indications pointing towards a further drop in average spot rates by April 1st.

Read the full report HERE.