Freight rates hit new highs! Major shipping companies began to attack this route
Recently, freight rates on European lines have risen rapidly. Market tension and shipping company strategic adjustments have made it difficult to book space even if you pay high freight rates. The freight rate on the South American route has soared, especially the freight rate on the east side of South America has exceeded the US$10,000 mark.
As freight rates have reached their highest point in the past two years, major shipping companies have begun to strengthen the layout of routes from China to Mexico. Shipping companies such as CMA CGM, COSCO and MSC have successively opened China-Mexico routes to meet the growing market demand.
COSCO Group and its subsidiary Orient Overseas launched the Trans-Pacific Latin America 5 (TLP5) route on May 6, providing fast transportation services between China, South Korea and Mexico, with transportation times ranging from 15 to 20 days.
In response, France's CMA CGM plans to launch a new M2X Mexico Express service on May 11, calling at Tianjin (Xingang), Qingdao, Busan, Ensenada, Manzanillo, Lazaro Cardenas, Yokohama and other ports. The first voyage of this service will be completed by the "ANL Wangaratta" (4253 TEU) sailing from Busan Port. This route will be operated by eight 4200 TEU container ships within 56 days.
Linerlytica analyst Tan Hua Joo pointed out that the increase in freight rates on the China-Mexico route comes against the backdrop of a general increase in freight rates on routes from Asia to South America, which has prompted carriers to shift more capacity to this route.
It is worth mentioning that MSC has also made adjustments to its routes, canceling U.S. port calls on Santana, one of its routes from Asia to the U.S. East Coast, and instead focusing on calls in Central America.
The last New York call of the Santana route was completed by the 15,264 TEU "MSC Martina Maria" on March 29. The subsequent voyage was shortened to the adjusted Far East-Mexico-Panama-Dominican Republic route, calling at Yantian, Ningbo, Shanghai, Busan, Manzanillo (Mexico), Cristobal, Coco Solo, Caucedo and Yantian.
The adjusted Santana route will begin services in the 11th week, with up to 11 ships of 8,000 to 15,000 TEU being deployed and additional port calls added to the new eastbound global route.
Linerlytica pointed out that MSC's withdrawal from USEC services will reduce the Far East-US East Coast route by approximately 10,000 TEU per week, as the company seeks to take advantage of more profitable freight rates on the Far East-Mexico and Latin America routes.
MSC's changes to Santana service coincide with the launch of its new Asia-Mexico West Coast service, calling at Qingdao, Ningbo, Shanghai, Busan, Manzanillo, Lazaro Cardenas and Qingdao. Starting from May 15, the turnaround time of this service will be 6 to 7 weeks, and ships of 4,000-7,000 TEU will be deployed. The first voyage will be the 6,492 TEU "MSC Apollo" departing from Qingdao.
Peter Sand, chief analyst at Xeneta, said that rates from the Far East to Mexico have now reached their highest level since September 2022, supported by Mexican demand for Chinese imported goods that increased by more than 33% year-on-year in the first quarter of 2024.
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