By Gavin van Marle

Container freight rates on the main east-west trade routes rebounded the last week of October after nearly two months of continual decline. Carriers had announced new freight all kinds (FAK) prices and general rate increases (GRIs) to come into effect next week. According to Shanghai Containerised Freight Index (SCFI) of October 27, the spot rate on the China-North Europe trade jumped 9.3 per cent, rising $63 to reach $744 per TEU.

Meanwhile the growth on routes between China and the U.S. was even more pronounced, with the transpacific lane to the U.S. west coast rising by 10.7 per cent to finish the week at $1,512 per 40ft, and the Asia-U.S. east coast route gaining 18.2 per cent to break the $2,000 per 40-ft barrier and finish at $2,075. The only east-west trade that did not enjoy a rebound was Asia-Mediterranean; stagnant, with a 0.9 per cent decline to $640 per TEU.

The increases will encourage carriers worried by the continuing decline on the routes, particularly Asia-North Europe, as they ready themselves for negotiations with customers on annual contract rates. However, there is lingering concern that rate levels are still way below what they were this time last year. According to Drewry’s World Container Index, the Shanghai-Rotterdam rate is down 9 per cent, while Shanghai-Los Angeles and Shanghai-New York rates are down 31 per cent and 30 per cent respectively.

However, the final quarter of 2016 saw a much-needed rate recovery after a ruinous first nine months for carriers, whereas most of 2017 has seen the east-west trades in rude health, evidenced by figures released by OOCL. It said its third-quarter 2017 volumes were 5 per cent up on the same period last year to reach just under 1.6 million TEUs across all trades. Asia-Europe liftings increased by 24.7 per cent to a shade under 300,000 TEUs, while its transpacific volumes increased 14.7 per cent to 475,000 TEUs. Total revenue was up 26.5 per cent to $1.45 billion. However, the recent rate weakness was explained by its loadable capacity increasing by 9 per cent and its load factor being 3 per cent lower. For the nine-month period ending 30 September, total volumes increased by 6.2 per cent year-on-year and revenue recorded a 19 per cent growth. OOCL’s overall average revenue per TEU increased by 12.1 per cent in the first nine months of the year.

Reprinted courtesy of The Loadstar (