Shanghai Containerized Freight Index, North Europe, week ending Dec. 13, 2013Spot container rates from Asia to northern European and Mediterranean ports measured by the Shanghai Containerized Freight Index jumped by more than $500 each in the week of Dec. 13, only a few days before a general rate increase set for Dec. 15-16. MSC, Hapag Lloyd, Maersk and CMA CGM announced increases of between $750 and $775 per 20-foot-equivalent unit.
“I remain completely baffled by the current state of the container freight market on the Asia-Europe trade,” said Michael Rainsford, freight trader for Morgan Stanley Commodities. “Fundamentals are average at best. Whilst a number of carriers have observed winter withdrawal programs, the underlying environment is weak. Skipped sailings and the latest GRI have certainly been a success story for the carriers. Rates have once again increased, stemming the bleed on the spot market that was drifting dangerously close to cash burn levels once again.”
The spot rate from Shanghai to northern European ports for the week ending Dec. 13 soared 60.7 percent or $599 from the week before, reaching $1,586 per TEU. This is the highest rate in this lane since Aug. 10, 2012. Rates in this lane decreased for the past five weeks following a $753 per TEU increase, however, they managed to hold on to $317 of this increase. The current rate is now up $916 from the week of Oct. 25, when it sat at $670 per TEU. The SCFI rate to northern Europe for the week ending Dec. 13 is 17.5 percent above where it was at the same point in 2012, and 24.9 percent higher than at the beginning of 2013.
Shanghai Containerized Freight Index, Mediterranean, week ending Dec. 13, 2013The spot rate from Shanghai to Mediterranean ports jumped 54.5 percent or $586 per TEU from the week before to $1,662 per TEU, according to the latest SCFI data issued by the Shanghai Shipping Exchange. This is the highest rate in this lane since July 13, 2012. Rates eroded $423 in the five prior weeks, but held on to $368 from the $791 per TEU increase of Nov. 1. The rate is now up $954 from Oct. 25, when it sat at $708 per TEU. The SCFI to the Mediterranean is up 38.6 percent year-over-year and up 43.5 percent from Jan. 1.
“Carrier success has of course come at the expense of the shipper,” Rainsford said. “Over the last few weeks amidst blank sailings and an ever closer GRI each day, utilization levels increased from just north of 80 percent, to levels reported by carriers as high as 95-100 percent. This has inevitably resulted in cargo being rolled. One cannot blame a shipper for being angry when picking up the phone to find out that their boxes will not load the vessel and certainly not at the pre-agreed price. Here ensues the artificially-driven scramble of shippers needing to scour the market for a firm slot at a firm price.”
