CHINA's May Day holiday, lasting five days from last Saturday, will delay liner operators' planned rate increases, and cargo volumes ex-Asia have dipped below expectations, further hampering contract negotiations with transpacific shippers.

Shipping line hopes were raised on April 14, when the Shanghai Containerized Freight Index showed Asia-US west coast rates had hit a five-month high of US$1,668 per FEU, capping four consecutive weeks of increases, reports London's Loadstar.

The Asia-US east coast rate had also risen, by nearly 20 per cent from April 7, to $2,565/FEU, however, recently, both rates dipped 2 per cent, to $1,633 for Asia-USWC and $2,510 for USEC.

Linerlytica noted that while capacity utilization on both lanes had been "decent", as a result of blanked sailings, the May Day holiday in China is expected to affect cargo volumes, especially as capacity is higher than during the lunar new year break.

It has been estimated that at least 440,000 TEU of capacity has been blanked last month.

The consultancy noted that, despite box line optimism that Pacific contracts could be finalized this month, a significant number of contracts remain in the balance.

"Negotiations with NVOCCs are particularly problematic for carriers, given the recent rate volatility," said Linerlytica. "Some have extended preferential NVOCC rates to the end of June, as the share of contract volumes has shrunk to less than 30 per cent."

China, the largest exporter of consumer goods, shipped 646,000 TEU to North America in March, 37 per cent less than the previous year, while South Korea, the second-largest, saw its volumes drop 17 per cent year on year, to 162,000 TEU.

Vietnam, which has been growing as a manufacturing centre at China's expense, saw a 31 per cent decrease in its March exports to North America, at 105,000 TEU, and Taiwan exported 65,000 TEU, down 33 per cent from a year ago.