The Shanghai Containerized Freight Index released April 3 showed that trans-Pacific lanes achieved very little of the proposed April 1 general rate increase. The Transpacific Stabilization Agreement and some of its member carriers, including OOCL, MSC and CMA CGM, had announced hikes of $400 per 40-foot container to the West Coast and $600 per FEU to all other destinations. West Coast lanes achieved 10 percent of the GRI, while East Coast lanes achieved a mere 7 percent, according to data issued by the Shanghai Shipping Exchange.
The spot rate to the U.S. East Coast rose 1.3 percent or $43 per 40-foot container to $3,454, which is actually only 26 percent of last week’s pre-GRI increasein this lane. The current rate is up 7.7 percent from the same week in 2012 and up 3 percent since the beginning of 2013.
The spot rate to the U.S. West Coast rose 1.7 percent or $38 to $2,302 per FEU this week. This is also a much smaller increase than last week, prior to the GRI. The current rate is up 13.5 percent over the same week in 2012 and 3.6 percent above the level seen at the beginning of 2013.
The SCFI results sharply conflict with Drewry’s release on Wednesday, which showed an achievement of 80 percent in the trans-Pacific West Coast-bound trade lane, which is unexplainable. This casts a shadow of doubt on the actual success of the April 1 GRI and raises the importance of next week’s results.
Benjamin Gibson, freight derivatives broker at Clarksons Securities, noted: “Despite the standard announcements yesterday from the TSA regarding contract negotiations and COSCO's aggressive $800/FEU GRI for May cargo, there is a growing feeling that U.S. demand is not strong enough to hold this increase and that spot rates may reverse for USWC and USEC next week.”