The spot index for shipping containers from Shanghai to Europe slipped below $1,000 per 20-foot equivalent unit this week for the first time since March 2009 as fears of vessel overcapacity pervaded the market.
The spot index slid to $992 per TEU, down $27 per TEU from last week, according to BIMCO, the independent shipping association in Copenhagen
“Low volumes have triggered fierce competition on main trading lanes including Shanghai-Europe,” said Peter Sand, a shipping analyst at BIMCO. “Rate cuts are ongoing as liner companies struggle to fill their vessels.”
By The Numbers: Asia-Europe Westbound Container Traffic
The Shanghai-to-Europe spot index has been sliding since mid-2010, interrupted only around the turn of the year, when shipping lines imposed general rate increases that proved to be short-lived and did not hold.
Since the Shanghai-Europe spot index increased $59 per TEU on Dec. 31, 2010, it has dropped 29 percent.
But the downward trends may be slowing.
“Following five weeks of serious rate cuts, the decrease this week is much smaller, giving reason to believe that sliding rates could be terminated over the coming weeks,” Sand said. “But we might go all the way into the peak season in the third quarter before sustainable spot rate levels on Shanghai-Europe are back.”
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