The Asia to U.S. market finally showed an increase in container shipments during the months of July and August. As a result, finding sufficient space on containerships became a challenge and spot rates increased significantly. Carrier executives were anxiously watching the last two months hoping the increase in volume was the beginning of a rebound that industry experts had been predicting for months.
Unfortunately for the carriers, future container projections do not support a rebound in container volume. A bump in container volume during the peak shipping months of July through October is expected. The bump that July and August experienced was not as strong as previous years. Further, the volume for September and October is being projected to be lighter than traditional peak season volume.
After several months of sustained increases, spot rates have leveled off. This is another revealing sign that carriers are worried about filling their ships over the next three months. The carriers blanked 15% of their capacity into the ports of Los Angeles and Long Beach during August. This tactic, coupled with the bump in volume, was the driving force behind increased spot rates and lack of space. With lower volume being projected through the end of the year, carriers will no doubt continue the strategy of blanking sailings.
From the carriers’ perspective, this year’s peak season is turning out to be a bust. The next big opportunity for a sustained rebound in container volume is the build up to Chinese New Year. If there is no spike in volume leading up to Chinese New Year, it will likely be the second quarter of 2024 before the Asia-U.S. market rebounds to normal volume levels.