Carriers abandon February General Rate Increase
The US military build up in the Arabian Gulf, meant to ease tensions, has raised fears of more conflict as insipid demand is seeing spot rates crash.
Continuing uncertainty in international markets have not been eased by the arrival of the US carrier group into the Middle East, forcing container operators to shelve rate increases.
The arrival of the aircraft carrier USS Abraham Lincoln and its escorts into the troubled region was, seemingly, enough for French operator CMA CGM to reverse its decision to return its Asia-Europe FAL1, FAL3 and MEX services to the Suez Canal, with these services now sailing around the Cape of Good Hope again.
Forbes reported on 26 January: “Even as the deployment of [the carrier group] CSG-3 was meant to promote stability, the arrival of the carrier and escorts could result in just the opposite. Yemen's Iranian-backed Houthi rebels threatened to resume attacks on commercial ships in the Red Sea in response to the US military build-up.”
Destine Ozuygur, senior market analyst at the ocean intelligence platform Xeneta, said: “Shippers crave predictability in supply chains”.
Without that predictability markets can be volatile, and consultant Linerlytica reports this week that the SCFI, which fell 7.4% last week, is expected to record further declines ahead of Chinese New Year, which starts on 17 February, as carriers “slash rates more aggressively before the holidays”.
