The Shanghai Containerized Freight Index has fallen below the $1,000 per 20-foot container mark in European lanes in the week prior to another proposed, but possibly delayed, general rate increase set for April 15 for carriers such as Hapag-Lloyd, Maersk Line, MSC and Cosco. On March 15, around 60 percent of a proposed $700-per-TEU increase was achieved, but all of these increases were given back over the past four weeks, as rates are lower than they were before that GRI.
Richard Ward, research analyst for container derivatives of ICAP plc, noted that there are reports that the scheduled April increase may have been delayed until early May. “The Asia-Europe trades sustained a hefty blow this week failing to implement any of the planned rate increase due for the 15th of April. The SCFI index traditionally reflects any successful increase prior to the implementation date but this has failed to materialize,” he said. “Worryingly for liners the outlook for demand is not set to significantly increase in the short term, meaning that the GRI delaying tactics may have limited or no impact.”
Rates to northern European ports fell 12.1 percent or $130 per TEU from the week before to $940, according to data issued by the Shanghai Shipping Exchange. The current index to northern Europe is 46 percent lower than it was at the same point in 2012, when it stood at $1,744, and 26 percent lower than it was on Jan. 1. Northern European rates have hit their lowest level since February 2012.
Rates from Shanghai to Mediterranean ports fell 11 percent or $118 this week to $955. The index is currently almost 46 percent lower year-over-year and 17.5 percent below where it was at the beginning of 2013.
“The increase in running capacity on Asia-Europe over the past few weeks has contributed to another poor week for SCFI Europe. The benchmark is now down below US$1000 for the third time since December as rate volatility keeps increasing,” said Benjamin Gibson, freight derivatives broker at Clarksons Securities.