Spot container rates from Asia to Mediterranean ports measured by the Shanghai Containerized Freight Index eroded by $62 per 20-foot-equivalent unit during the week ending Sept. 20. Rates fell below the $1,000-per-TEU mark for the first time since the end of May.
“Quite where the current decline is going to stop is hard to gauge, however, it is ugly and getting uglier by the day.” said Benjamin Gibson, freight derivatives broker at Clarksons Securities.
The spot rate from Shanghai to Mediterranean ports dropped 6.2 percent from last week to $944 per TEU, according to the latest SCFI data issued by the Shanghai Shipping Exchange. This was the seventh consecutive week of declines in this lane; rates have tumbled 36.8 percent or $549 per TEU during this period. The SCFI to the Mediterranean is now off 22.6 percent year-over-year and down 18.5 percent from Jan. 1.
The spot rate from Shanghai to northern European ports fell 9.4 percent or $91 from the week before to $875 per TEU. Also dropping for seven weeks, rates to northern Europe are down 41.7 percent or $626 per TEU during this time. This week’s SCFI to northern Europe is 25.3 percent below where it was at the same point in 2012, and 31.1 percent lower than at the beginning of 2013.
“The GRI merry-go-round has started advertising again - Maersk's Nov. 1 increase of $600-per-TEU on Asia-Europe lanes follows comments from the carrier that current levels are unsustainable; whilst this is clearly correct, perhaps it is time to switch from a freight band aid to something a little more drastic. A temporary fix to any problem is inherently temporary, allowing the underlying issue to be fixed ... rather than an oft-recycled remedy,” said David Barnes, freight derivatives broker at Clarksons Securities.