FREIGHTOS: OCEAN CONTAINER RATES FALLING BUT STILL ABOVE YEAR-AGO LEVELS
Ocean container rates on trans-Pacific services to the United States are trending lower but remain elevated from year ago prices. Analyst Freightos (NASDAQ: CRGO) said Asia-U.S. West Coast rates fell 8% to $4,362 per forty-foot equivalent unit in its Baltic Index for the week ending Feb. 21 from the previous week. Asia-U.S. East Coast prices were off 11% to $5,698 per FEU. “The post-Lunar New Years lull has seen rates fall 30% since January which includes reductions in some peak season surcharges that have been in place for more than a year,” Freightos Head of Research Judah Levine said in a research note. “Some of the current demand dip may be temporary and due to unavailable supply as factory production is still recovering post-holiday.” General rate increases implemented by some carriers to shore up falling rates have met with mixed success; blank, or canceled, sailings are being used to balance capacity. Operators may also scrap older tonnage once new vessels enter service. But expectations of lower rates have lately been tempered by the Trump administration, whose recently imposed or expected tariffs on imports from China, Canada and Mexico are leading logistics planners to reassess supply chains.
TRUMP’S TARIFFS IMPOSED
US President Donald Trump has confirmed that tariffs planned for local trading partners Mexico and Canada will be imposed from March 4 at the original 25% level. Tariffs were to be imposed a month ago because Trump said that the flow of illegal drugs and undocumented migrants was unacceptable, however, the two countries agreed a month’s grace to stem the flow of fentanyl from Canada and Mexico has accepted illegal migrants returned from the US. Data from the US suggests only 1% of fentanyl comes from Canada. Yesterday afternoon, local time, however, President Trump announced in the Oval office, “There’s no room left for Mexico or for Canada, the tariffs, you know, they’re all set. They go into effect tomorrow. “He added: “What they’ll have to do is build their car plants, frankly, and other things, in the United States, in which case they have no tariffs. “In addition, 10% additional tariffs on America’s largest trading partner, China, will also be imposed, bringing the tariffs levied on Beijing to 20%. China, Mexico and Ottawa have all promised counter measures. Prime minister Justin Trudeau said Canada would levy 25% tariffs on $30bn of US goods from March 4 and on a further $125bn of US goods in three weeks’ time.
SMART CONTAINER ALLIANCE LAUNCHES
The Smart Container Alliance has been launched to drive the adoption of smart container technology. This initiative aims to unite industry stakeholders in a collective effort to enhance cargo traceability, fortify maritime trade, and support global enforcement agencies in the fight against criminal networks. The Smart Container Alliance aims to advance industry standards, advocate policy change, and foster collaboration between technology providers, shipowners, customs authorities, and international regulatory bodies, including the European Union and the World Customs Organization. “Smart cargo and container telematics are the foundation for the 21st century supply chain with revolutionary new solutions for our society, authorities, governments and businesses to structurally reduce illicit trade, cargo contamination, cargo waste, theft and supply chain carbon footprint while simultaneously enhance product authentication, on-time delivery commitments, asset productivity and cargo integrity and quality,” stated Charles Vincent, CEO of ARVIEM.
CMA CGM SPENDS $2.5BN ON A DOZEN NEWBUILDS AT CHINA’S JIANGNAN
France’s CMA CGM has signed up for a fresh series of containership newbuilding’s in China. The Marseille-headquartered liner giant is being widely tipped as the owner behind a dozen LNG dual-fuel 18,000 teu vessels contracted at CSSC Jiangnan Shipyard. The order comes hot on the heels of the United States Trade Representative (USTR) agency’s proposal to charge Chinese-built vessels as much as $1.5m per visit to US ports. The deal is worth between $2.5bn and $2.6bn and will see the ships delivered in 2028 and 2029.It is CMA CGM’s second order for large containerships this year, following a $2.6bn contract for another twelve 18,000 TEU LNG dual-fuel newbuilds at Korean shipyard HD Hyundai Heavy Industries.
The Rodolphe Saadé-led company, which is trailing closely behind Maersk in the largest liner rankings, built the world’s first 23,000 teu LNG-powered ships and Jiangnan and has more lined up for delivery from the yard in 2025 and 2026.