The Shanghai Containerized Freight Index spot rates for Shanghai to U.S. trade lanes rose signficantly in the week of June 28, with both East and West Coast-bound lanes achieving more than 60 percent of the general rate increases recommended by the Transpacific Stabilization Agreement. The TSA recommended a July 1 GRI of $400 per 40-foot container from Asia to the U.S. West Coast and $600 to all other U.S. regions. Hapag-Lloyd, OOCL and Cosco took part in these increases.
“The U.S. trades saw a jump this week, although the proportion of the planned increase reflected on the index is significantly less than those to Europe. Similar to Europe, expectations are that these will decline in the coming weeks. There is now a significant opportunity for carriers to be selling into the GRI, removing the risk that the increases cannot be maintained,” said Richard Ward, research analyst for container derivatives at ICAP.
The spot rate from Shanghai to the U.S. West Coast jumped 14.6 percent or $269 from the previous week to $2,114 per FEU, putting it above the $2,000 mark for the first time in June, according to the latest SCFI data issued by the Shanghai Shipping Exchange. This jump helped the lane achieve 67 percent of the $400 proposed GRI. Before this week's increase, rates had fallen in this lane for four straight weeks, down a total of 12 percent or $248 per FEU. The current spot rate declined 18 percent year-over-year, the 12th straight decline, and is 4.8 percent or $107 below the level seen at the beginning of 2013.
The spot rate to the U.S. East Coast rose 12.6 percent or $377 per FEU to $3,361. As a result, the rate gained 63 percent of the proposed $600 GRI. Prior to this increase, rates fell for four straight weeks, dropping a total of 8.3 percent or $270 per FEU. The current index remains down 10.4 percent from the same week in 2012 but has inched up 0.1 percent or $3 since the beginning of 2013.