Shipping rates on Asia-Europe routes see record fall
Major container shipping rates plummeted again this week, with declines on the trunk Shanghai-Europe routes falling at record amounts, according to the latest Shangahi Containerised Freight Index (SCFI).
The SCFI for Far East to North Europe dropped by a staggering 31%, losing US $143 per teu to finish the week at US $313 per teu. The rate to the Med also finished at US $313 per teu, one the first times that the southern gateways have commanded a similar freight rate to Europe’s northern ports.
The Far East to Med route decline represented a drop of 30%, or US $135 per teu. The decline represents a potential loss for shipping lines operating ultra large container ships of US $2.4-million on a single voyage.
The depth of the rate loss will therefore be of major concern to shipping executives preparing for China’s seven-day public holiday, otherwise known as Golden Week.
The week begins on 1 October, and sees factories across China close down – putting added pressure on container shipping rates due to a temporary drop in demand.
It appears from the SCFI report that the rate restoration programme announced by some carriers for implementation on 20 September was either abandoned altogether or failed to gain traction.
OOCL had planned to increase rates to US $500 per teu, while Hapag-Lloyd said it would seek a $950 per teu general rate increase on all westbound shipments to North Europe and Mediterranean ports to be applied on 19 October.
The attempts to force rates up to more sustainable levels will soon be accompanied by a series of blank sailings announced by carriers over the past week.
The 2M alliance, run by Maersk and MSC, has cancelled next week’s AE6 sailing, the AE1 sailing in week 41 due to depart Shanghai on 7 October and the AE5 and AE2 sailings in week 42, departing Shanghai on the 12 and 13 October respectively.
Similarly, the O3 Alliance has cancelled the FAL23 and FAL12 in week 41 and the FAL8 the following week. The G6 Alliance has also cancelled its Loop 6 next week, Loop 7 the week after, Loop 4 in week 42 and Loop 5 in week 43.
Trans-Pacific and Asia-US East Coast trades also fell this week, but not to the same extent as those to Europe, with the Shanghai-US west coast leg down 6.4% at US $1,291 per feu while the Shanghai-US east coast route dropped 4.5% to US $2,318 per teu.
Industry analysts Alphaliner repeated this week its long-running assertion that shipping lines need to pull more capacity from the market to stabilise rates.