August proved to be yet another bullish month for container freight rates with very little give in terms of capacity fundamentals. This collided with the build-up for the Q3 ‘peak’ in volume and Ningbo closures removed any hope of abatement of congestion on the transpacific. There was no give up on any of the fronthaul routes. 

FBX01 stayed well above the $20,000/FEU mark for Aug21 contracts, only dipping down at the end of the month and sharpening down closer towards daily changes in the spot price.

However, forward curves consistently price in at a premium above the spot market. FBX01 stayed well above the $20,000/FEU mark for Aug21 contracts, only dipping down at the end of the month and sharpening down closer towards daily changes in the spot price. We saw the same on FBX03, with the East Coast shipping at around a $3,000-$5,000 premium over the West Coast and holding a good correlation. Near-term markets remain in contango up until Oct21, Sep21 pushing close to the $30,000 mark on FBX03. Transpacific backhaul prices continued to bump about during the month, but forward curves remained consistent in a shallower backwardation.

Interest has started to push back into 2022 and 2023, making the market far more attractive to ocean liners looking to back out of risk incurred by very high time charter rates and record-breaking ship ordering.

Asia to Europe continued its surge, only pulling back slightly at the end of the month after continually testing its highs. As with the Asia-US fronthauls, the market remains in short-term contango, slipping into a backwardation that kept on softening as we pushed through the month. Interest has started to push back into 2022 and 2023, making the market far more attractive to ocean liners looking to back out of risk incurred by very high time charter rates and record-breaking ship ordering. As it stands, FBX11 Cal22 value sits $4,474/FEU above the average settlement price of FBX11 in 2020 – now indicatively bid in at $6,000/FEU. Although avoiding the record-breaking congestion now in on the transpacific trade, Asia-Europe may suffer from the shift of capacity away from the highly profitable transpacific routes.

 

About Peter Stallion, Head of Air and Containers, Freight Investor Services

Peter Stallion heads up the Air and Container Freight desks at FFA brokerage Freight Investor Services. He started his career in air freight chartering, and has a passion for emerging risk management markets and the logistics industry.



Receive monthly container market reports direct to your inbox.