After eight straight weeks of declines, average spot rates on the westbound Asia-Europe trade jumped by 13.1 percent on July 5 as carriers on that route put general rate increases into effect ranging between $400 and $500 per 20-foot equivalent unit.
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, increased to $3,521 per laden 40-foot container from $3,112 on June 28.
“The increase accepted by the market was $409 per FEU — only about half of what the carriers wanted,” said Philip Damas, director of Drewry Supply Chain Advisors. He said Drewry expects that rates will erode again over the next few weeks.
Despite the increase, this week’s WCI did not manage to get back to the level of $3,878 it reached on May 3, when carriers put the last GRI of about $800 per FEU into effect on the route. Since then the WCI has declined by 9.2 percent.
Carriers have returned almost half their idle capacity to global trade lanes in the last three months as a result of the four general rate increases they have secured so far this year, according to BIMCO.
Carriers had been able to hold onto most of the four large GRIs they put into effect since January, because they have kept vessel capacity relatively tight. This week’s WCI is still 186 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 several weeks.