Drewry’s Hong Kong-Los Angeles Container Rate Benchmark dropped 6.2 percent in the week of June 26, according to the latest release of the Drewry Hong Kong-Los Angeles Container Rate Benchmark. This comes only days ahead of the July 1 general rate increase.
“Pricing is expected to strengthen post the GRI but not likely to sustain as weak load factors will weigh on rates,” Drewry said in its latest release. Their outlook for the global container shipping industry is ‘grim’.
The Transpacific Stabilization Agreement is recommending a GRI of $400 per FEU from Asia to the U.S. West Coast for July 1. Hapag Lloyd, OOCL and Cosco have already set a $400 GRI for July 1. Cosco also announced a $400 peak season surcharge on 40-foot containers from Asia to North America, effective July 15.
The trans-Pacific spot rate is currently $1,836 per FEU, down $121 after remaining at $1,957 for three straight weeks. This week’s drop eliminated all gains from the May 21 GRI and put the current rate $64 below the rate prior to the increase. It is now at its lowest level since early March 2012.
This week’s rate is down 32 percent year-over-year and 17 percent or $377 below the rate at the beginning of 2013.
The Asia-U.S. West Coast Shanghai Containerized Freight Index dropped for a fourth week. In the week ending June 21, the trans-Pacific West Coast-bound rate fell 2 percent, or $36, to $1,845 per FEU.