CONTAINER PREMIUMS: Premium demand remains weak for US imports amid China lockdowns

All-inclusive container rates into North America were largely unchanged during the week ended April 29 amid slow booking activity and more easily accessible FAK rate space.

This comes as lockdowns in and around Shanghai persisted through their fourth week, and containerized exports from the globe's largest production hub continued to be muted.

"Space is open in most of Asia as a result of the volume drop from central and north China, especially ex Shanghai," a carrier source said, adding that May volumes and freight rates are likely to be rangebound against those seen throughout April. "There is no clear news in as far as when Shanghai can be completely reopened."

During the week to April 29, S&P Global Commodity Insights heard a significant number of FAK bookings, and premium indications remained scant. However, sources suggest that priority equipment, loading, and transit fees can command a $1,000-$3,000 premium over FAK base rates.

Platts Container Rate 13 – North Asia-to-West Coast North America – were assessed at $8,200/FEU April 28, while cargo bound for the USEC was assessed at $11,300 /FEU.

"Supply and demand remain in better balance on TPEB, although the future outlook is uncertain," said Flexport in a notice to customers April 27. "Rate levels remain elevated relative to the pre-COVID-19 market with softening in several pockets... consider premium options."

SEA-NA market dips

The all-inclusive premium rates on the Southeast Asia-North America route slipped during the week ended April 29, with availability and space becoming more easy to come by in the region following extended shutdowns in North Asia, sources said.

The all-inclusive spot rates from Indonesia for East Coast North America (ECNA) were heard at $14,000/FEU and $13,000/FEU for West Coast North America (WCNA), against the $17,000-$18,000/FEU and $15,000/FEU heard in the market last week, sources said.

"The situation in China has helped space open up from Indonesia, and as a result, the all-inclusive spot rates have also eased," a freight forwarder based in the country said.

From Singapore, a key transshipment port in the region, all-inclusive spot rates were heard as high as $17,000/FEU to ECNA and $15,000/FEU to the WCNA.

"However, these rates are quite high in the current scenario," a Singapore-based cargo owner said, adding, that space has become available at rates in the region of $11,000 (bunker excluded) and $9,000 (bunker excluded) to the east coast and west coast of North America from Singapore.

"What happened with Yantian (China) going into lockdown last year is repeating, with space opening up in Southeast Asia [and Singapore] again and with it premium rates have continued their fall," the source added.

On the China-to-India trade route, SPGCI heard all-inclusive rates in the region of $2,500 per TEU from Qingdao to Nhava Sheva for an overweight container carrying 25 mt of cargo.

"The situation in China has had a severe impact on our business, the delays are extensive, and we are currently making bookings two to three weeks in advance," a logistics provider based in India said.

"The rate [$2,500/TEU] we have received is an all-inclusive number with no bifurcation specifying the ocean freight, bunker factor, or the surcharges we've paid considering our cargo was overweight."