Spot rates for container shipping are staying up, but only because ocean carriers continue to blank voyages big time.
If you were shipping and you feared your voyage would be blanked, what would you do? You would be prepared to buy some shipping at spot, to be sure you can get on the ship. Your ratio of long-term (and possibly delayed) contracting for shipments and your short-term purchases would change in favor of the short term. And that would keep short term demand up in spite of a long-term need going down. That’s what’s happening now.
With COVID-19 out there, and no certainty about international trade, it seems certain that conditions are much worse than are being reported based on shipments. At some point the other shoe will drop, and all prices will go down. We need not to trust the BIMCO spot prices for future predictions right now.
By Mike Wackett