The Shanghai Containerized Freight Index fell 4 percent from last week to a reading of 579.60, with rates on the Shanghai to North Europe trade dropping 13.1 percent after a May 1 Asia-North Europe general rate increase eroded.
The Shanghai Shipping Exchanges Shanghai Containerized Freight Index (SCFI) fell 4 percent since last week, from a reading of 603.64 to a reading of 579.60, after the May 1 general rate increases (GRI) issued by various major ocean carriers on the Asia to North Europe and Mediterranean trades quickly eroded.
Spot container rates surged 31.9 percent the previous week in anticipation of the GRIs.
Rates from Shanghai to Northwest Europe and the Mediterranean combined, which hold a 30 percent weight on the overall SCFI, have declined 13.1 percent and 7.5 percent, respectively, since last week.
On the Shanghai to Northwest Europe trade, rates fell from $732 per TEU to $636 per TEU; and on the Shanghai to Mediterranean trade, rates fell from $944 per TEU to $873 per TEU.
However, in mid-May, CMA CGM, Hapag-Lloyd and OOCL will increase rates from Asia to North Europe and the Mediterranean, while MSC will increase rates on the Asia to North Europe trade.
All of the increases will range between $200 per TEU and $280 per TEU, with the exception of Hapag-Lloyd’s increases. From Asia to North Europe, the German carrier will increase rates by $900 per TEU, $1,700 per FEU and $1,700 per 40-foot high cube container; and from Asia to Mediterranean, the carrier will increase rates by $1,125 per TEU, $2,150 per FEU and $2,200 per 40-foot high cube container.
Meanwhile, Xeneta’s crowd-sourced rate platform indicates that long term contracts of 3 months or more on the Asia-Europe trade have declined significantly, Richard Ward, a container derivatives specialist at Freight Investor Services said.
“Currently the average market rate on the trade is 46 percent lower than the same time last year, whilst those that can achieve rates towards the lower end of the market have seen their costs fall by 64 percent,” Ward said. “Even with longer dated contracts expected to increase in Q3 by around 10 percent, they will remain roughly 30 percent lower than those in 2015.”
Rates from Shanghai to the U.S. West Coast inched up 0.7 percent since last week, from $857 per FEU to $863 per FEU, while rates from Shanghai to the U.S. East Coast dipped 0.6 percent, from $1,694 per FEU to $1,683 per FEU.
SCFI falls back after last week’s jump
