The Shanghai Containerized Freight Index continued its decline in the week of March 8 across all trade lanes, with European lanes dropping below the $1,000 per 20-foot container mark, according to data issued by the Shanghai Shipping Exchange.
Shanghai Containerized Freight Index
Source: Shanghai Shipping Exchange
Rates to northern European ports fell 9.5 percent or $105 per TEU to $999 this week. This is the seventh straight week of decline, with rates falling 29.5 percent or $419 per TEU since January 11. Rates from Shanghai to Mediterranean ports dropped by 7.1 percent or $73 this week to $960. Also in a seven week decline, rates to the Mediterranean have fallen 29.2 percent or $396 per TEU since the week of January 11. This week Europe rates broke through “the psychological US$1,000 mark,” said Richard Ward, research analyst for container derivatives of ICAP plc, although he said “[i]t is understood that carriers are quoting significantly higher rates for Europe post March 15th due to the $600-$775 (general rate increase). It remains to be seen if they will hold steady or if the GRI will be cut or perhaps even pushed back until April should cargo demand remain subdued.”
Rates to the U.S. also declined this week, but the declines continued to be less severe than on the Asia-Europe trade. Spot rates to the U.S. East Coast slipped 3.3 percent this week or $115 per 40-foot container to $3,332. Rates are up 14.3 percent from the same week in 2012 but down just under 1 percent since the beginning of 2013. Rates to the U.S. West Coast dropped 4.3 percent or $98 to $2,189 per FEU this week. The current rate is a 24.9 percent increase over the same week in 2012, but down 1.4 percent since the beginning of 2013.
Benjamin Gibson, freight derivatives broker at Clarksons Securities, said: “The fact that we are seven days away from the Asia-Europe GRI date will have escaped few and the increased weakening of the Westbound (to Europe) spot market, to the point that we are once again below $1000 US$ per TEU on SCFI Europe, will be seen as significant. Of course, this market is notoriously volatile and it would not be a precedent for it to bounce back next week, but the sentiment is not strong.”