‘Major meltdown’ for Transatlantic, says Xeneta

However, at US$2,000 per FEU excluding THC, North Europe to US East Coast long-term rates are still 2.5 times above spot levels, meaning this is the only fronthaul trade where long-term business remains above short-term rates; all other key trades have normalised in this respect.

Transport volumes on the trade were down by 14% in the first half versus last year (source: CTS), with April alone scoring a 23% year-on-year fall. This is clearly visible from Xeneta data, showing a spot-market slide from US$3,875 per FEU at the end of March to US$2,450 per FEU by 1 May.

“The second quarter was worse than the first, and looking ahead, Xeneta expects demand to fall short of 2022 during every month in the second half as well,” said Mr Sand.

Secondly, carriers have used this trade lane as a “parking lot” for excess capacity not deployed on other corridors. Data from Sea-Intelligence indicates that capacity on the North Europe to US East Coast trade rose by 24% in the first half compared with 2022, and by more than 30% just in February and April. “This leaves shippers wondering how much longer they should wait for carriers to start offering long-term rates that mirror underlying market conditions – in other words, much lower than today,” said Mr Sand.

“Carriers, for their part, can see as clearly as ever the impact of a fundamentally weak trade resulting in spot-rate warfare. Those selling space at the current level are bleeding cash for every box they bring on board. Hence keeping cosy with key shippers is essential, but everything has its price,” said Mr Sand.

“The shipping market’s unpredictability underscores the importance of diligent market monitoring and strategic timing. While aiming for absolute rock-bottom rates is challenging, inching closer remains achievable if done at the right time, especially when armed with the right data insights,” Mr Sand concluded.

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