Six Month Outlook

Today the import market saw yet another series of measurable decreases on freight costs. While USWC rates have dramatically slowed their decline due to approaching near market-lows, we continued to see large decreases for USEC lanes. A large portion of USEC trade approached as much as $1,000 reductions from November 1 pricing. IPI/Rail rates continue to decline as well.

Both current and future projections on TP Trade capacity indicate major cuts. With rates plummeting, steamship lines continue aggressive blank sailing practices. Overall, capacity still greatly outpaces demand even with manipulation of vessels. In a call last week, Hapag-Lloyd CEO Rolf Habben said “…we would never sail ships with 50% [utilization]. We would always sail one ship with 100%, simply because we can take out a tremendous amount of costs.”

October, at 2.02MM TEU, an 8.5% annual decrease

November, at 1.92MM TEU, a 9.2% annual decrease

December, at 1.9MM TEU, a 9% annual decrease

January, at 1.98MM TEU, an 8.4% annual decrease

February, at 1.71MM TEU, down 19.1% from the unusually high Feb ‘21