Further declines on East-West ocean spot freight rates
East-west ocean freight spot rates suffered marginal declines last week, reflecting further softening following early August losses for lines, according to the latest figures from the Shanghai Containerized Freight Index (SCFI). However, spot freight rates on key lanes still remain far ahead of 2016 levels.
Average spot prices on the Asia-North Europe trade fell 0.4% in the week ended 11 August, and were also down 1.2% on the Asia-Mediterranean trade at $849 per TEU.
Year-on-year analysis of SCFI figures also revealed that last week's average spot prices on the Asia-North Europe and Mediterranean trades were higher by 20.8% and 21.5% per TEU, respectively, when compared to the corresponding week in 2016.
Spot rates for a 40 ft container shipped to the US East Coast and West Coast from Shanghai on August 11 were up by 48.2% and 34.9% year-on-year, respectively.
The market context going back 12 months is significantly different to the current one. Despite reports of improved utilisation levels, the first two weeks of August 2016 brought double-digit weekly declines in Asia-Europe ocean freight spot-rates with carriers failing to hold prices above the $1,000 /TEU level initially achieved through 1 August general rate increases (GRIs).
A year on, the pricing environment is far more stable, not least due to liner consolidation and the new alliance system. For example, two weeks ago GRIs pushed up rates by 4.8% on the Asia-North Europe trade to $963/TEU. Today, prices are just 3.3% lower, SCFI figures show.
As for the Asia-US trades, the 1 August 2017 hikes lifted US East Coast and West Coast rates by 20% and 37%, respectively, to $2,685/FEU and $1,687/FEU. A fortnight later, they have only shed only 2.4% and 2.7% after those initial gains.