The Shanghai Containerized Freight Index saw further significant drops in European lanes two weeks after a general rate increase was implemented by Asia-Europe carriers, including APL, CMA CGM, OOCL and Hapag-Lloyd.
In the week ending March 15, Asia-Europe trade lanes saw an increase of about $400 per 20-foot container, indicating carriers had achieved around 60 percent of a proposed $700 per TEU increase. They have given much of these gains back over the past two weeks, however, with sharp declines in both the Asia to North Europe and Asia to Mediterranean lanes.
Current rates to northern European ports are down 9.1 percent or $114 per TEU from last week to $1,140. The current spot rate to northern Europe is 31.3 percent lower than it was at the same point in 2012, when it stood at $1,660, and 10.2 percent lower than it was on Jan. 1.
Rates from Shanghai to Mediterranean ports fell 7.1 percent or $86 this week to $1,128. The index is currently 31.6 percent lower year-over-year and 2.6 percent below where it was at the beginning of 2013.
Another general rate increase has been planned in this trade lane for April 15, with carriers such as Hapag-Loyd, Maersk Line, MSC and Cosco announcing increases.
“More press coverage has been given to carrier Asia - Europe GRIs for April, which would seem to reinforce the idea that carriers are sensitive to the inability of the spot market to maintain higher rates,” London-based analyst ClarksonBoxClever noted. “In reality, we are likely to see a GRI every month until carriers acheive rates they are happy with, the success of which will be the management of capacity and utilization levels, not a surge in demand. With talk of westbound services being suspended in the medium term and the omnipresent threat of new ULCS tonnage being delivered at the back end of the year, the only certainty is that rate volatility will continue.”