Spot rates on the westbound Asia-Europe trade fell for the third consecutive week, indicating vessel overcapacity on the route and weak European import demand are eroding the general rate increases ocean carriers put into effect on May 1.
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, dropped 4.5 percent this week to $3,401 per laden 40-foot container from $3,560 on May 17.
This week’s WCI shows a drop of 12.3 percent in the last three 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 onto 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 177 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 from recent highs as idle capacity returns to the trade and carries deploy newly delivered ships. This will make it more difficult for carriers to collect peak-season surcharges of $250 to $400 per TEU they are seeking in June.