Shanghai Containerized Freight Index spot rates for U.S.-bound trade lanes continued to decline in the week of May 3, showing no achievement of a May 1 $800-per-FEU general rate increase to the West Coast proposed by Cosco, U.S. Lines and MOL. This was the fourth straight week of declines in Asia-U.S. lanes.
“Although not all carriers had made official announcements for the 1st, this will be a setback to contract negotiations that usually use the spot market as a barometer for annual rates,” said Richard Ward, research analyst for container derivatives of ICAP PLC. “The U.S. trades have developed in a similar way to Europe.”
The spot rate to the U.S. East Coast slid 1.2 percent or $38 per FEU since last week to $3,213, according to the latest SCFI data, issued by the Shanghai Shipping Exchange. This is the lowest rate in this lane since early December 2012. The current rate is down 10.2 percent from the same week in 2012 and down 4.3 percent since the beginning of 2013.
The spot rate to the U.S. West Coast fell 1.7 percent or $35 to $2,067 per FEU this week. Despite a decline, the index dropped at a decelerated rate this week. The current spot rate is down 14.3 percent year-over-year and is 7 percent below the level seen at the beginning of 2013.
“Spot rates in the Pacific have slid as spot paying cargo drops closer to the levels being negotiated by BCO contract shippers,” said Benjamin Gibson, freight derivatives broker at Clarksons Securities.