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CONTAINER RATES SOAR FOR EASTBOUND FREIGHT

Mar 28 2017

Container freight spot-rates from North Europe to China rose 45% last week to a four-year high due to unexpectedly strong eastbound volumes, especially to China, plus service cuts post-Chinese New Year. European exporters needing to ship export containers from Europe to Asia and the Middle East have been facing unusually tight capacity for the time of year for several weeks leading to rising rates, booking restrictions, and backlogs.It is highly unusual for the ‘backhaul’ route from Europe to Asia – where vessels normally have load factors of less than 70% – to see such spikes in rate levels and capacity shortages. 

Domestic policies in China are stimulating demand and hence requiring raw materials (industrial input like chemicals, wood, paper and recyclables); a decline in Asian imports from Europe for the last 12-18 months means re-stocking; and strong demand continuing in areas like food and beverages – commodities such as meat, milk powder and alcoholic beverages.

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