The Shanghai Containerized Freight Index continued to fall this week across many trade lines with European lanes seeing the largest drops, according to data issued by the Shanghai Shipping Exchange.
Shanghai Containerized Freight Index
Source: Shanghai Shipping Exchange
During the week ending Mar. 1, rates to northern European ports fell 7.9 percent or $95 per 20-foot container to $1,104. This is the sixth straight week of decline, with rates falling 22.1 percent since January 11.
These spikes and declines have occurred frequently over the past few months due to price hikes imposed by carriers. In their most recent newsletter, Alphaliner explains “Carriers have mostly failed to hang on to their proposed rate increases on the FE-North Europe route in each of their last three attempts on 1 November, 15 December and 10 January respectively. In each of those attempts, initial rate increases were rapidly rolled back as weak capacity utilization led carriers to favour volumes over higher rates.” It has been announced that on March 15 carriers will try to implement a GRI of about $700/TEU in the Asia-Europe trade.
Richard Ward of ICAP said: “As we saw last year, the combination of planned GRI’s and weak fundamentals created extreme rate volatility across all the main deep sea trade lanes. At present the same conditions appear to be in place, which is likely to create substantial volatility during 2013.”
Spot rates from Shanghai to Mediterranean ports also dropped, falling 10.0 percent or $115 per TEU to $1,033. This rate is down 27.0 percent from the level of $1,416 in the same week of 2012. Mediterranean rates have also been declining for six weeks, dropping 23.8 percent or $323 per TEU from $1,356 in the second week of 2013.
Rates to the U.S. continued to fall this week, too, but less drastically than the Asia-Europe rates. Spot rates to the U.S. East Coast slipped 2.0 percent this week or $70 per FEU to $3,447. Rates are up 18.2 percent from the same week in 2012, when the rate was $2,916. Rates to the U.S. West Coast dropped 3.3 percent or $77 to $2,287 per FEU this week. The current rate is a 30.0 percent increase over the same week in 2012, when the rate was $1,759.
ClarksonBoxClever commented “There is little new information available on capacity changes, although the bounceback of running capacity after [Chinese New Year] seems to have been the driver of this weaker market and some trimming seems necessary if carriers are to have any success with rate increases over the coming months.”