By Alex Whiteman
Container shipping rates on the main east-west trades rose this week, reversing two weeks of decline, with analysts predicting a continuing upward trend. Spot rates recorded on the Shanghai Containerized Freight Index (SCFI) this week rose 8 per cent on the Asia-North Europe leg, to $755 per TEU. This followed a week off for the SCFI as China went into celebration mode for its Golden Week. The index had recorded a dip of 8.5 per cent immediately before Golden Week, while the week before that saw a decline of 20.9 per cent.
While Asia-North Europe pricing appears to be on the rebound, trade between Asia and the Mediterranean continued to decline, with rates down 3 per cent to $565 per TEU. Patrik Berglund, Chief Executive of Xeneta, which provides a freight rate benchmarking tool, said longer-term contract rates for 40ft containers on Asia-North Europe had climbed 47 per cent over the past six months. “In April, these rates were $361, they now stand at $965, representing a 168 per cent increase,” he said. “If short-term rates [which showed growth between the second and third quarters] continue to rise, it will make for a fantastic negotiating position.”
As if on cue, CMA CGM announced its freight all kinds (FAK) rates on the Asia-Mediterranean and Black Sea routes would be $1,150 per 20ft and $2,200 per 40ft from 15 October. And earlier this week, Hapag-Lloyd announced a rate restoration programme beginning on 1 November that would see its FAK rates increased to $1,250 per 20ft and $2,400 per 40ft for North Europe and the West Mediterranean, and $1,550 per 20ft and $3,000 per 40ft for East Mediterranean and Black Sea destinations. These come on the back of OOCL’s $800 per TEU rate restoration effort which begins on 17 October.
Transpacific carriers, which held on to gains made by the Hanjin fallout, also recorded strong rate increases by mid-October. Rates between Asia and U.S. west coast ports were up 13 per cent to $1,914 per 40ft, while U.S. east coast ports reported growth of 6 per cent at $2,563 per 40ft.
Mr. Berglund said west coast short-term rates bottomed out in April at $782 per 40ft. They started the third quarter at $1,243 per 40ft and closed on $1,826. “These price changes reflect an upward trend, which will benefit long-term contracts,” he added.
Reprinted courtesy of The Loadstar (www.theloadstar.co.uk)