The overall reading of the Shanghai Containerized Freight Index has continuously declined since Dec. 31, but many ocean carriers will attempt to implement general rate increases starting in March.
The Shanghai Shipping Exchange’s Shanghai Containerized Freight Index (SCFI) fell again today to a reading of 486.70, a 14.2 percent decline from the last SCFI reading published two weeks ago.
The SCFI is created by panelists from liner companies and shipping lines, which estimate spot container freight rates from Shanghai to 15 regions around the world.
Since two weeks ago, rates from Shanghai to Northwest Europe declined 23 percent, from $431 per TEU to $332 per TEU, while rates from Shanghai to the Mediterranean tumbled 24.2 percent, from $454 per TEU to $344 per TEU.
Rates on both of these trades have continuously declined since Dec. 31, heavily contributing to the continued fall in the overall SCFI reading since then.
However, Hapag-Lloyd is increasing rates on the Asia to North Europe and Mediterranean trade March 1, while CMA CGM will also raise rates from Asia to North Europe March 1.
On March 15, the French ocean carrier will also increase rates on the Asia to Mediterranean trade. OOCL also has plans to raise rates from Asia to North Europe and the Mediterranean March 15.
Meanwhile, rates from Shanghai to the U.S. West Coast declined 19 percent since two weeks ago, from $1,321 per forty-foot container (FEU) to $1,070 per FEU. In addition, rates from Shanghai to the U.S. East Coast fell 11.4 percent since two weeks ago, from $2,341 per FEU to $2,074 per FEU.
Hapag-Lloyd, however, also plans to increase rates from Asia to the U.S. and Canada March 1.
Elsewhere, rates to the South American east coast fell to their lowest level ever to $99 per TEU, Richard Ward, a container derivatives broker at Freight Investor Services said.
“It may not be an immediate priority for some carriers, however those active in the FFA (forward freight agreement) market are able to secure a premium to current spot levels, thereby reducing their exposure to declining rates,” Ward said. “By securing cash flows in advance, they then may be better placed to service future commitments, thereby avoiding the liquidity crisis that HMM reportedly finds itself in.”
Spot container rates drop 14.2%
