Spot container rates fromfrom Asia to Europe measured by the Shanghai Containerized Freight Index saw their steepest weekly declines since mid-April in the week ending Sept. 6. Rates have been decreasing for the past five weeks in these lanes, and this sixth drop indicates ocean carriers failed to achieve any of the general rate increases proposed for Sept. 1. NYK, MSC, UASC, OOCL, Maersk, CMA CGM, and Hapag-Lloyd had announced increases ranging between between $300 and $650 per 20-foot-equivalent unit.
“The inability from carriers to maintain rates can be attributed to the fact that the planned GRI that was due to come into force in September has failed, highlighting the limited effectiveness of such rate restoration methods,” said Richard Ward, research analyst for container derivatives at ICAP. “With cargo demand likely to drop off as we enter the slower winter season, then at present there does not appear to be any evidence that suggests the market can support future rate increases. Of course history has shown us that if carriers can make the necessary capacity adjustments in unison, then there is always a possibility that they can reverse the declines. Therefore how rates now develop for the remainder of the year really does depend on the action of carriers. At present the only reduction in capacity on the trade lane is scheduled to coincide with the Chinese holiday in October, which will not offer any long term support.”
The spot rate from Shanghai to northern European ports fell 9.3 percent or $110 from the week before to $1,073 per TEU. During the past five weeks, rates have eroded 28.5 percent or $428 per TEU. The current SCFI index to northern Europe is 16.4 percent below where it was at the same point in 2012, and 15.5 percent lower than at the beginning of 2013.
The spot rate from Shanghai to Mediterranean ports slid roughly 8 percent or $96 week-to-week to $1,115 per TEU, according to the latest SCFI data issued by the Shanghai Shipping Exchange. Rates have fallen 25.3 percent or $378 per TEU during the current five-week slump. The SCFI index to the Mediterranean is now off 15.8 percent year-over-year and down 3.7 percent from Jan. 1.