Container spot freight rates from Asia to European ports measured by the Shanghai Containerized Freight Index fell further in the week ending July 19, losing more of their achievements from the July 1 general rate increase. This was the third straight week of decreases, pulling total gains from the GRI down to $726 per 20-foot container in northern European ports and $69 in the Mediterranean.
The spot rate from Shanghai to northern European ports fell 4 percent or $50 this week to $1,240 per TEU. The rate has fallen 12 percent or $169 over the past three weeks. The current SCFI index to northern Europe is 25.6 percent below where it was at the same point in 2012, and 2.4 percent or $30 below Jan. 1.
The spot rate from Shanghai to Mediterranean ports also fell in teh week ending July 19, down 5 percent or $63 from the week before to $1,235 per TEU, according to the latest SCFI data issued by the Shanghai Shipping Exchange. The rates for ocean carriers have fallen 11 percent or $151 in the past three weeks. The current SCFI index to the Mediterranean is 25.2 percent below where it was at the same point in 2012, but 6.6 percent or $77 above where it was on Jan. 1
“Contradictory to the declines, reports this week indicate that vessel space is limited at best and that roll pools in Asia are beginning to appear. If these reports are accurate, it should offer some support to the index in the coming week and will also be positive news for carriers given the upcoming GRIs,” said Richard Ward, research analyst for container derivatives at ICAP. Hanjin and MOL were the first to announce subsequent $500 per TEU increases for Aug.1 in the Asia-Europe lane, and carriers such as OOCL, Mediterranean Shipping Co., Hyundai Merchant MArine, Hapag-Lloyd, Zim Integrated Shipping Services, Cosco and United Arab Shipping Co. have followed suit with similar increases. Maersk announced an increase of $300 per TEU for Aug. 1. NYK Line set a rate restoration of cargo from Asia to Europe for Aug. 10, an increase of $570 per TEU.
“Despite the shor-term optimism, long-term prospects are still weak with figures released from China’s Ministry of Transport confirming that volumes developed mostly flat for the month of June. In particular, volumes at Shanghai and Singapore were relatively unchanged whilst traffic at the port of Hong Kong declined 0.3 percent. With long-term growth remaining weak, short-term fluctuations in demand and the continued use of GRI’s will ensure rate volatility will continue to be the market norm,” Ward said.