Container spot rates are mixed bag

The SCFI continued its downward trend this week, but rates to the U.S. West Coast and East Coast South America rose.

   The Shanghai Containerized Freight Index on Friday fell 51.69 points to 911.03.
   But the component of the index that measures rates from Shanghai to the U.S. West Coast jumped $248 this week to reach $2,139 per forty-foot equivalent unit.
   Richard Ward of Freight Investors Services in London said a planned GRI to the U.S. West Coast “was partially implemented. This has helped push rates in the spot market 23-percent higher than during the same period last year.”
   He added that rates from Shanghai to the East Coast of South America “increased a whopping 57 percent, week-on-week, to $1,298 with the implementation of yet a further GRI. Volatility on this particular trade lane has increased significantly over the past 12 months.”
   FIS said rates on the Asia-North Europe trade continued to fall.
   The spot rate, as published by the SCFI, on cargo from Shanghai to North Europe fell $33 to $705 per TEU.
   “As expected, there was no increase despite the planned mid-October GRI of around $500 per TEU, suggesting further weakness in the market post the Golden Week Holidays,” said FIS.
   “Due to the continued declines, additional carriers have announced their plans to push rates up at the start of November by between $775-$900 per TEU, as they look to increase rates from their current yearly low,” FIS added.
   “At present it’s too early to tell whether their planned increase will be a success, but given rates are considerably lower than break-even, there will be a strong desire to see a repeat of last year when rates jumped 112 percent at the start of November. What carriers will not be hoping for is a rapid erosion of the GRI, which was experienced in 2013 and led to further GRI’s being announced for December.”
   During the past week, Maersk said it would implement a general rate increase on cargo moving from Israel to the U.S. on Nov. 14 of $200 per TEU and $300 per FEU and 45-foot high cube containers.