ASIA-MEXICO OCEAN RATES HITS ITS LOWEST LEVEL IN 18 MONTHS

"After 9 months, the market returned to 4-figure values, a situation that produces a slight respite for the importing sector."

The Eternity Asia Index (EAX) reflected an ocean freight rate of USD 9,300 per 40-foot container (on average in March, a month in which the downward trend continued based on February's rate of USD 11,950/FEU; the rate even reached a low of USD 7,659/FEU, the lowest level in the last 18 months.

The EAX index, prepared by freight forwarder Eternity Group Mexico, detailed that, at a general level, the impact of the collapse of the short term rate (FAK/SPOT) translates into a drop of 22.17% compared to the EAX level of February; the above for the maritime corridor from Asia to the United States and Mexico.

It can be said that the international maritime freight plummets due to several factors, among which stand out: a slow recovery of production in China since the Chinese New Year, a strong speculation on the updated cost of goods, generated by the price increase in raw materials (as a consequence of the war conflict in Europe); added to the quarantine applied by the Chinese government in the main export centers of the world (Shanghai - Shenzhen - Hong Kong).

These situations generate a decrease in export volumes, and the available FAK space quickly adapts downwards in an attempt to seduce the speculative volumes still available. However, part of this missing volume in March is not considered to be linked to a low demand, but to the inability at origin to correspond in time and form with goods.

The month of April begins to show capacity to respond to the available spaces and the downward trend seems to find a floor for the second week of this month. At the end of April and beginning of May a recovery of the sea freight level, limited spaces and forced transfer times is expected.

Export activity from Mexico remains solid and vessel utilization levels are high, causing rate levels to increase considerably (mainly to the Caribbean and Central America).

Finally, in the United States, the ports of Long Beach and Los Angeles continue to experience severe delays, as vessel berthing wait times are still in the range of approximately 25-40 days.

Source: T21 Mexico.