Spot container rates from Asia to North Europe eased slightly after a forceful rally that took rates up 174 percent as part of a July 1 general rate increase that carriers saw as perhaps their last big opportunity to achieve profitability in 2013.
The Shanghai Containerized Freight Index rate to North Europe slipped 4.5 percent on Friday from $1,409 to $1,346 per 20-foot-equivalent unit, having jumped from $514 the previous week. Seizing on the success of the GRI, Hanjin and MOL announced subsequent $500 per TEU increases for August, and other carriers are likely to follow, analysts said. “Carriers will no doubt want to take full advantage of the recent upward momentum in rates,” said Richard Ward, an analyst with ICAP.
The easing of rates this week falls into a familiar pattern where increases aren’t able to be sustained. “The pummelled (North Europe) route has now seen rates decline 133 weeks out of the last 183” since the SCFI began, Ward said. “Once again this indicates how fundamentals continue to place pressure on rates and that carriers attempts to push rates up cannot be sustained in the current market environment, only adding to market volatility.”
Indeed, despite the success of North Europe GRI, sentiment remains negative. “TSA lines (in the trans-Pacific) were quick to announce a further August 1st GRI, gambling on the continued U.S. recovery to lift volumes in their favour, but Asia-Europe lines may have a much tougher task ahead,” Clarksons said in a commentary.
Rates from Shanghai to the Mediterranean, which rose 59 percent on a GRI on June 1 in the runup to the European holiday season, also eased this week, dropping 1.7 percent.