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Asia-Europe rates fall for 13th consecutive week

Date: 10/06/2015

Freight rates on the Asia-north Europe trade fell to their lowest level since the inception of the Shanghai Containerised Freight Index last week.

The latest SCFI shows box prices slipping for a 13th consecutive week by a further 12.5%, or $50, to $349 per teu, bringing the average for 2015 down to a shade under $820 per teu. At this stage last year, after the first 17 weeks of 2014, the average was some 40% higher, at slightly over $1,147 per teu.

Freight rates from Shanghai to Rotterdam on the latest World Container Index published by Drewry, meanwhile, have slumped to $724 per feu, down 66% on this time last year.

Carriers operating the key east-west trade, however, will be looking to halt the slide from this week, as their latest round of general rate increases come into effect. Having failed with previous attempts to push up prices during March and April, carriers will therefore be hoping it will be a case of third time lucky.

However, it is extremely unlikely that Asia-north Europe carriers, including CMA CGM, Cosco, CSCL, Evergreen and Mediterranean Shipping Co, will see increases as high as the $1,000 per teu they are pushing for, and certainly not the $1,300 per teu GRI being recommended by United Arab Shipping Co.

Yet there are some inconsistencies that could still undermine the latest price push, with MOL, for example, moving to postpone its $850 per teu GRI originally planned for May 1 by another week, and Yang Ming, which has recommended a $500 per teu increase on its services, by a fortnight. Meanwhile, Maersk, coming fashionably late to the GRI party, will look to increase rates from May 4.

On the Asia-Mediterranean trade last week it is a similar story, with lines again pinning their hopes on May 1 GRIs. This week, freight rates fell to their lowest level since May 2009, to $476, down 11.9%, or $64, on the previous week.

After sharp declines a fortnight ago on the transpacific trades, following the partial acceptance by the market of GRIs recommended by member lines of the Transpacific Stabilization Agreement three weeks ago, freight rates to either coast of the US remained relatively flat last week, according to the SCFI. For Asia-US west coast services, freight rates fell 27%, or 1.7%, to $1,596 per feu, while to the US east coast from Asian destinations, prices slipped 1.5%, or $57, to $3,644 per feu.

Drewry’s Hong Kong-Los Angeles container freight rate benchmark, meanwhile, was unchanged at $1,639 per feu. Drewry said it expects the benchmark, which runs a week behind the SCFI, to be less volatile in the lead up to their first round of the TSA’s rate minimums, effective May 1.

Also of note last week was how rates on the Asia-South America (Santos) trade fell to its lowest ever level of $409, as weak economic development in Brazil, Argentina and Venezuela and the cascading of larger vessels on the north-south trades continues to increase rate pressure on these routes.

Finally, last week’s SCFI Comprehensive Index slipped 2.7%, or 19.15 points, to a new record low of 702.46 points.

Source: Lloyd’s List                       

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