Rates from Shanghai to Northwest Europe and the Mediterranean dropped for the third week in a row, according to data from the Shanghai Containerized Freight Index.
Spot container rates as measured by the Shanghai Containerized Freight Index (SCFI) tumbled again since last week on major trades from Shanghai to Northwest Europe, the Mediterranean, the U.S. West Coast and the U.S. East Coast.
The overall SCFI, which includes spot rate estimates from Shanghai to a total of 15 regions around the world, dropped 9.5 percent Friday from a week earlier to 674.54.
Since last week, rates from Shanghai to Northwest Europe dropped from $640 per TEU to $469 per TEU, while rates from Shanghai to the Mediterranean dropped from $661 per TEU to $449 per TEU.
This is the third consecutive week in a row rates to Northwest Europe and the Mediterranean have declined. Three weeks ago, rates to Northern Europe were at the highest price since the end of January, and rates to the Mediterranean were the highest since the first week of March, according to Lloyds Loading List.
Since last week, rates from Shanghai to the U.S. West Coast dropped from $1,719 per 40-foot container (FEU) to $1,585 per FEU, while rates from Shanghai to the U.S. East Coast dropped from $3,159 per FEU to $2,846 per FEU.
Major carriers will again attempt to implement general rate increases (GRIs) Sept. 1 of around $1,000 per TEU. Although they may be at least somewhat successful initially, they are not likely to hold, as illustrated from GRI’s implemented in August, Richard Ward, a container derivatives broker at Freight Investor Service in London said.
The year-to-date average weekly decline currently stands at $107 per TEU. In 2013, the average weekly decline stood at just $65 per TEU.
“This points to the fact that the declines on average are actually accelerating, leading to increased volatility and a greater need for carriers to implement ever larger GRIs,” Ward said.
However, in the first half of 2015, demand on the Asia to North Europe trade dropped 3.5 percent, while capacity on the trade increased 3.4 percent, according to Alphaliner. As a result, carriers may have difficulties trying to actually implement GRIs, added Ward.
Spot container rates continue decline on major trades
