The late-year busy period for carriers is annually followed by a January surge in shipments as retailers prepare for the Chinese New Year. With global shipping in a recent slump, though, the start of 2016 is colored by mixed signals.
The holiday is Feb. 8, but factories in China shut down a week early so that workers can travel home to their families beforehand. Due to this, retailers squeeze shipment of goods into January to ensure that their inventories are not negatively affected by the factory shutdown in China. The Chinese New Year disruption led to heavy contraction in the country's manufacturing sector this year and surplus capacity continued to be a problem for carriers through January. For these reasons, despite the usual early-year rush, 2016 kicked off with a whimper rather than a bang.
"Following the Chinese New Year shipments are expected to enter a lull."
Spot-rates have been moving steadily downward following a brief rise in late December, the Journal of Commerce (JOC) reported. Shippers told the media outlet that the rates for forty-foot equivalent units (FEU) have been volatile ahead of the Chinese New Year. The publication explained that the state of Asia-North Europe spot rates indicates that shippers lack bargaining power at this time, and are not likely to see the market improve soon.
Following the Chinese New Year, shipments are expected to enter a lull as they typically do after the first quarter boom period. At that point, the JOC explained, carriers will most likely cut the services they offer to adapt to the slow stretch of shipments. These services will remain suspended until demand picks up again – at least relative to the slow year carriers expect in 2016.