The Drewry benchmark rate for shipping from Hong Kong to Los Angeles fell by $100 for a third straight week, erasing the $250 per 40-foot-equivalent unit increase seen in mid-November and even dropping $50 below the pre-GRI level.
The rate dropped 5.6 percent or $100 per FEU in the week of Dec. 11 to $1,686. This was its lowest level since the week of Dec. 28, 2011, nearly two years ago. The current rate sits 23.8 percent or $527 below Jan. 1 and is down 22.2 percent year-over-year.
Drewry expects further price erosion leading up to the December 20 general rate increase recommended by the Transpacific Stabilization Agreement, post which another short lived recovery in rates is expected, Drewry said in this week’s release. The member lines in the TSA are now attempting a two-stage rate increase, adopting general rate increases of $200 per 40-foot container, effective Dec. 20, and $300 per 40-foot container, beginning Jan. 15, 2014, for the Asia-to-U.S. trade lane. Hapag Lloyd, OOCL, and U.S. Lines have already announced a similar increase for Dec. 20.
According to SCFI data issued by the Shanghai Shipping Exchange, the spot rate from Shanghai to the U.S. West Coast dipped further last week, slipping another 2.9 percent, or $51, in the week of Dec. 6 to $1,717 per FEU. SCFI’s latest decrease was roughly half of the amount that Drewry’s benchmark dropped.