The Shanghai Shipping Exchange measure for spot container rates to Europe fell below $500 this week, the lowest the SCFI index has reached in the world’s largest and most troubled container shipping market.
The SCFI Shanghai Containerized Freight Index for Asia-to-Europe business fell 2 percent in the second week of December from the week before, to $490. The Asia-Mediterranean component fell 5.6 percent week-to-week, to $652, also a 2011 low.
That helped bring the overall SCFI down 1.5 percent from the previous week to $855.5, off about 19 percent since mid-August.
The measure of the market for spot rates to U.S. destinations was stable by comparison, slipping 0.5 percent to both West Coast and East Coast destinations. But the Asia-Europe SCFI has been in near free-fall since August, when the combination of weaker demand because of Europe’s troubled economies crashed against the growing supply of capacity that’s with the introduction of larger vessels on the trade lane.
The Asia-Europe SCFI is down about 63 percent since the start of the year.
Industry analysts say the spot rates for Asia-Europe lanes are now below the basic level of compensation for voyage costs.
Carriers have started to pare some of their capacity, and the recent global capacity pact between Mediterranean Shipping and CMA CGM includes agreement to share consolidated vessel space on Asia-North Europe lanes.