Peter T. Leach, Senior Editor | May 18, 2012 10:35AM EDT
Average spot rates in the westbound Asia-Europe trade fell 4 percent on May 17 from the week before, indicating the most recent general rate increases ocean carriers put into effect on May 1 are not holding up in the face of vessel overcapacity and weak European import demand.
The World Container Index of spot prices in the trade from Shanghai to Rotterdam, which is compiled by Drewry and the Cleartrade Exchange in Singapore, declined 4 percent this week to $3,560 per laden 40-foot container from $3,708 on May 10.
This week’s WCI shows a drop of 8.2 percent in the last two weeks from the WCI of $3,878 per FEU on May 3 that followed carriers’ May 1 general rate increase of about $800 per FEU.
Carriers have been able to hold on to most of the four large GRIs they put into effect since the beginning of the year, because they have kept vessel capacity relatively tight. This week’s WCI is 189 percent higher than the WCI of $1,230 per FEU on Jan. 4, which reflects the carriers’ discipline in maintaining those rate increases.
But spot rates now are beginning to ease off from recent highs as idle capacity returns to the trade and newly delivered ships are deployed.
Alphaliner said Tuesday that carriers’ efforts to impose peak-season surcharges on the Asia-Europe trade in June may fall apart in the face of rate-cutting.
Deliveries of big new post-Panamax ships in the first four months of the year, together with the return of idle capacity, have added 280,000 TEUs of capacity to the trade.
Contact Peter T. Leach at pleach@joc.com. Follow him on Twitter @petertleach.
