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FBX Index: Looking forward

The market has come a long way in a few months, shipper demands for capacity collided with liner demands for restraint mid-2020, have now peaked with anecdotally ‘maxed out’ capacity, and 2020 going down as one of the worst years in container liner history for contract reliability. In terms of forward pricing, Trans-Pacific mid-values have remained largely in line with upward correction since October 2020, with January spot rate growth of 9.69% on FBX01 a result of extreme congestion on the US West Coast. Buyers in the market have become more confident in pricing in a backdated 2021 forward curve, however interests remain highly diverse in both FFAs and physical shipments.

Asia to Europe continued to grow in January, with FBX 11 up 12% since the beginning of the month.

Asia to Europe continued to grow in January, with FBX 11 up 12% since the beginning of the month. Much of this appears to be the tail-end of an enormous rate spike that began in November, as spot prices start to gently come-off at the end of the month. The FFA forward curve for the Asia-Europe head haul had seen continuous correction for Q1 21 and the individual months in line with these spot price changes. However, confidence has started to grow in terms of pricing from Q2/3 21 and Cal 21 onwards. Buyer and seller interest remain in favour of closing a very widespread in interests generated on the back of the 2020 container market bull run.

We have also started to see prices on the head-haul routes spread into the back-haul price. The end of 2020 saw the cancellation of a number of back-haul commodity shipments that have since returned at higher rates, with the routes now approximately in correlation with each other, albeit at a substantial and understandable discount.

About Peter Stallion, Head of Air and Containers, Freight Investor Services

Peter Stallion heads up the Air and Container Freight desks at FFA brokerage Freight Investor Services. He started his career in air freight chartering, and has a passion for emerging risk management markets and the logistics industry.
Source: Baltic Exchange

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