Spot container shipping rates in the Asia-Europe trade soared 165 percent in the week of July 4 as general rate increases carriers implemented on July 1 took hold, according to the World Container Index.
As of Thursday, rates in the benchmark Shanghai-Rotterdam trade were $2,622 per 40-foot container, up from $990 a week earlier.
Carriers in May and June announced plans to raise rates by $1,000 per 20-foot-equivalent container unit on July 1. “Over three-quarters of the planned $1,000-per-TEU rate increases was implemented, based on our assessments in China and Europe,” WCI Director Richard Heath said.
The spike brings a volatile year for the Asia-Europe trade full-circle for the year. Rates at the end of June fell to a 19-month low, to within $46 per FEU of the December 2011 trough, industry analyst Drewry noted. This week’s increase brings Asia-Europe rates back to levels at the beginning of the year.
Whether they have staying power, however, is uncertain, as demand struggles to keep up with growth in capacity. “We expect the rate increase to be partly reversed in the next few weeks,” said Martin Dixon, Drewry’s research manager for freight rate benchmarking. “However, the price correction will also serve to forestall any further erosion in contract rates that were originally agreed at the start of the year when the market was stronger.”