The Shanghai Containerized Freight Index dropped this week after two weeks of increases in trans-Pacific lanes as a result of the 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.
“Although the trans-Pacific has been more stable [than Asia-Europe], both U.S. West Coast and U.S. East Coast have turned negative again following moderate GRI success. With the idle fleet being run down and some service changes expected into May, the next few weeks could be critical for setting the rate environment going into the summer,” said Benjamin Gibson, freight derivatives broker at Clarksons Securities.
The spot rate to the U.S. East Coast dropped 2.1 percent or $74 per FEU to $3,380 since last week. In the prior two weeks, rates had increased $207. The current rate is down 4 percent from the same week in 2012 but up 0.7 percent since the beginning of 2013.
The spot rate to the U.S. West Coast fell 3.3 percent or $76 to $2,226 per FEU this week. During the two previous weeks, rates had increased $198. The current rate is down 2.6 percent over the same week in 2012 and up 0.2 percent above the level seen at the beginning of 2013.
“The GRI’s that were enforced at the beginning of the month are already being eroded. With only a limited proportion of the planned increase coming into force then the increase will not offer any sustained financial respite. At the current rate of erosion rates will be back to levels prior to the April 1st GRI within the next 1-2 weeks,” said Richard Ward, research analyst for container derivatives of ICAP plc.