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The last Shanghai Containerized Freight Index (SCFI) of the year gave container lines more optimism for 2017 after a dreadful 12 months of trading.

All the SCFI’s main tradelanes registered impressive spot rate gains as the index published on 30 December leapt 15.5%.

Rates from Shanghai to North European ports increased 11.3%, to $1,168 per teu, and for Mediterranean ports, rates were up 12.8% to $1,086 per teu.

Anecdotal reports suggest demand is strong prior to the Chinese new year holiday, which commences on 28 January – particularly good news for carriers in their negotiations with shippers for annual contract rates.

One UK manager at a major carrier told The Loadstar it had declined to respond to some Asia-North Europe tenders where it knew rates were being touted below $1,000 per teu. He said that, given the current robust market, the company’s strategy was “to take a higher ratio of spot traffic, at least until the Chinese new year”.

There was also good news for transpacific carriers: the SCFI component for Asia to the US west coast surged 24.8% to take the spot rate to $1,923 per 40ft, while for the US east coast, the rate jumped 18.6% on the week to $3,100 per 40ft.

Negotiations for transpacific tradelane contract rates normally do not start until March/April for commencement in May, but if the market remains firm after the CNY, then there could be a clamour from shippers to tie down their yearly rate agreements earlier.

Other notable increases in spot rates for the final SCFI of 2016 included a massive 61% jump in rates to Santos (to $2,828 per teu), a 39% leap in rates to Durban (to $1,116 per teu) and a healthy 23.9% increase in rates to West Africa, to $1,786 per teu.

It goes without saying that increases of this magnitude in spot rates at a time when rates are normally under pressure, will give ocean carriers, and their shareholders, a boost in confidence. Nevertheless, the critical period will be post-CNY when demand reduces and carriers are again forced to chase cargo to fill their ships.

In this respect, all the current four vessel-sharing alliances have announced plans to blank sailings during this period.

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