Average spot prices on the Asia-Europe trade slipped again this week for the fifth week in a row, reflecting the growing amount of new capacity that is being deployed and of idled vessels that are returning to the trade.
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 2 percent this week to $3,229 per laden 40-foot container from $3,295 on May 31.
This week’s WCI shows a drop of 16.7 percent in the last five 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.
The continuing decline in spot prices reflects the fact that carriers are returning some vessels to the trade that they had idled during the slack winter months, which is eroding the pricing discipline they had maintained during the first quarter.
Drewry said last week it believes spot freight rates have peaked and will soften through the second half of the year. But it said the decline would not be as “precipitous” as it was in 2011.
“Carriers will continue to push for higher rates as each new month comes around. But the success of these attempts will diminish and prove short-lived,” Drewry said in a bulletin issued last week.
Carriers had 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 163 percent higher than the WCI of $1,230 per FEU on Jan. 4, which reflects the carriers’ discipline in maintaining those rate increases until the last month.
Contact Peter T. Leach at firstname.lastname@example.org.