Container shipping rates hit by overcapacity as slack season takes its toll
This week brought further evidence of the eroding container freight rate environment, as spot rates ...
Spot container freight rates fell on the major deepsea tradelanes again this week, after a series of FAK increases failed to make any gains for carriers.
According to this week’s Shanghai Containerised Freight Index (SCFI), the routes to the Middle East, South Africa and Singapore showed very marginal gains, while every other route witnessed declines.
The Shanghai-North Europe leg saw its spot rate decline by 3.9%, or $37 per teu, to rest at $924 per teu this morning. It saw a similar decline last week.
Similarly, the Shanghai-Mediterranean leg was some 3.7% on last week, dropping by $35 per teu to finish the week at $914 per teu.
In response, CMA CGM yesterday announced a new FAK level of $1,100 per teu and $2,000 per 40ft to be applied on 1 June from Asia to North European and Mediterranean ports.
The declines were more marked in the Asia-US trades, with the transpacific route to the US west coast seeing its spot rate down by 8.5% to $1,310 per 40ft, while the Asia-US east coast declined by 5.5% to $2,298 per 40ft.
Another big loser was the Santos leg, which after last week’s steep 16.5% increase, saw rates drop 6.5% to rest at $3,069 per teu.
Meanwhile, similar movements were recorded on this week’s World Container Index (WCI), as assessed by Drewry Maritime Research.
“The spot rates on the Asia-Europe trade continue to tumble, and as a result, the World Container Index on Shanghai to Rotterdam declined by 3% or $58 to $1,811 for a 40ft box.
“Similarly, GRIs on the transpacific trade are also losing ground, but at a slower pace. This week, the WCI on Shanghai-Los Angeles and Shanghai-New York fell by another 9% and 3% respectively,” it said yesterday.
The WCI’s composite index fell 3.6% this week, although carriers can at least count on the fact that it is up 43% over the same period of 2016.
“The average composite index of the World Container Index for the year to date is $1,587 per 40ft, $118 lower than the five-year average of $1,705 per 40ft. It is 43% higher than a year ago,” Drewry said.