Study: Transpacific freight rates to drop in 4th quarter
Eastbound transpacific container freight rates will decline in the fourth quarter as a result of the addition of vessel capacity, a survey conducted by the Korea Maritime Institute shows.
The “2004 Third Quarter Shipping Market Forecast” of the Korean institute predicts an increase in rates during the second quarter, but suggests that the trend will be reversed later on this year.
“In the third quarter, box rates for transpacific (eastbound) and Asia/Europe (westbound) routes are expected to rise by 5.5 percent and 7.4 percent respectively, compared to the second quarter, following continuous export volume increase from China,” the Korea Maritime Institute said.
But after the third quarter, liner freight rates on the transpacific route will “turn to decline as an effect of newly delivered vessels entered into service,” it predicted. By contrast, the Korean institute predicts rates on Korea’s short-sea routes and on the Asia/Europe route will keep rising or start to rise.
The Korea Maritime Institute said 23 shipping companies and agencies responded to its survey.
In the dry bulk sector, both freight rates and charters are forecast to decline in the third quarter. After the third quarter, dry bulk freight rates and charters are expected to begin rising again because Chinese steel inventories will be exhausted and grain imports to China will increase, according to the specialized institute.
“After experiencing both ‘China Effect’ and ‘China Shock’ and (an) additionally related psychological bubble, (the) global shipping market in 2005 will follow the fundamental supply and demand curve,” the Korea Maritime Institute said. It believes that the most important factors in the market will be the Chinese economic policy and the number of newly delivered vessels.