News
Spot rates are sluggish due to weakening demand on the Asia-North America trade, but spot rates for the retail industry are higher than the market average, according to Xeneta, an Oslo, Norway-based ocean and air freight rate benchmarking and market analytics platform.
Spot rates for the retail industry surged on April 1, expanding the gap between retail industry rates and the market average from $25 per FEU in late March to $145 per FEU. By the end of June, retail spot rates had reached $1,300 per FEU, standing $40 per FEU higher than the market average.
On the trans-Pacific trade, there have been two general rate increases (GRIs) in recent few months. The average spot rate also increased as a result but turned downward shortly, falling below the level it had been before the GRIs. The weak spot rates reflect a decrease of 26.9% in container volumes on the trans-Pacific in the first four months of the year. However, despite import volumes have fallen dramatically, U.S. retail sales have continued to grow modestly, up 2.2% year on year in the first five months of the year.
Xeneta anticipates heavy discounts to lower stock levels and a poor peak season for shipping. For the majority of retailers and wholesalers, stock levels are higher than what they would like. It indicates that once these are drawn down, a stronger link between retail sales and container imports will be seen.
