News ID: 80259 |
Publish Date: 16:44 - 29 October 2018

Asia-Europe ocean rates stabilise after September crash

Transpacific prices remain almost double their level last year, although US trade policy continues to be a source of uncertainty for shippers.

Asia-Europe rates are still sitting at less than 70% of their 2018 peak, despite a slight improvement in the past week.

THERE are tentative signs that lines have managed to stem spot freight rate losses on Asia-Europe services as they prepare for annual contract negotiations with shippers.

Spot freight rates from Shanghai to Genoa dropped by just $14 per feu to $1,378 last week, and prices on the benchmark Shanghai-Rotterdam lane remained stable at $1,247 per feu, up 14% compared with a year earlier, according to the World Container Index assessed by Drewry.

“China-Europe prices continue to stabilise after crashing through September, when several large carriers cut their ‘freight all kinds’ rates,” said digital rates specialist Freightos. “Prices had dropped by $715 over four weeks, from $2,201 on September 9 to $1,486 on October 7.

Despite last week’s small further decline on the Shanghai-Genoa box trade, rates on the trade are still up 17% compared with a year earlier, according to Drewry. However, Freightos noted that prices on the China-North Europe and China-Mediterranean lanes were less than 70% of their 2018 peaks.

Drewry said the average composite index of the World Container Index covering all major trades is now US $1,484 per feu, which is $32 lower than the five-year average of $1,516/40ft container.

“Drewry’s composite World Container Index slid negligibly by $0.05 to $1,666.10 (last week) per feu,” said the analyst. “No significant change in rates kept the index almost similar to last week (and) we expect the rates to remain same next week.”

On the transpacific, there was a divergence in east coast and west coast rate trends last week. Freight rates on Shanghai-New York services decreased by $38 to reach $3,348 per feu, while rates on the Shanghai-Los Angeles trade grew $31 to reach $2,621 per feu. Current rates on the two services are 87% and 98%, respectively, higher than a year ago.

“The biggest influence on transpacific ocean freight prices, last week, though, was the mid-month general rate increase for China-West Coast only, which increased prices by 7%,” said Flexport. “Further GRIs have been announced for November 1 and 15.”

The digital forwarder said transpacific shippers were continuing to prepare for the impending 25% tariffs on Chinese imports scheduled to take effect on January 1. “As the holiday season rush continues, vessel space is expected to remain tight,” it added.

“While peak-season for holiday shipping typically ends in November, spot rates are expected to remain high through the end of the year.”

Your comment
* Comment:
most visited