Container shipping ex-China grinding to a halt – carriers 'can’t carry on much longer'
The coronavirus outbreak in China continues to severely disrupt supply chains, the few export sailings ...
Container spot rates from Asia to North Europe gained more traction this week, surging past the $1,000 per teu watershed to a level only briefly seen on the route once prior to the peak season.
The Shanghai Containerized Freight Index (SCFI) recorded a 12.5% increase in spot rates to North Europe to $1,046 per teu, following a 20% jump the week before, marking a significant recovery from the SCFI’s 17 March all-time low of $205 per teu.
One carrier told The Loadstar this week that they were, “still playing hardball with shippers”, by stalling 2017 contract negotiations on the expectations of further hikes in market rates.
He said: “Some of the weaker carriers are doing deals but the market has been helped by both UASC and Hamburg Süd effectively withdrawing from contract cargo for next year.”
“The number of reps knocking on their doors has gone down massively,” he added.
He also noted a “lack of enthusiasm” from the Japanese lines to chase cargo after the announcement of the merger of the trio’s container businesses.
Since 7 December, Asia-Europe carriers are obliged to change the way that they make price announcements to customers, based on commitments given to the European Commission after a five-year long anti-trust investigation into alleged “price signalling”.
The carriers undertook to “stop publishing and communicating GRI (general rate increase) announcements” on the tradelane.
Instead carriers are allowed to publish all-inclusive maximum freight rates for the route – however, these must be made more than 30 days before the implementation date.
Furthermore, the published FAK (freight all kinds) rates must be the maximum prices for the validity period, inclusive of surcharges.
Several carriers, including Hapag-Lloyd and Maersk Line, dispensed with GRIs some time ago, while others have adopted the FAK system more recently.
Many forwarders have told The Loadstar that they had given up recording the GRI announcements, judging them to be “meaningless” in the context of the market.
For example, in 2015 one carrier announced GRIs totalling over $6,000 per teu from Asia to North Europe, while ending the year with an average rate of just $942 per teu on the trade.
Meanwhile, CMA CGM has announced new FAK rates for Asia-North Europe effective 15 December of $1,250 per 20ft and $2,400 per 40ft.
Interestingly, the French carrier’s new FAK rates represent a discount on the $1,450 and $2,800 rates set on 1 December.
Elsewhere, spot rates for Mediterranean ports also improved on the week, gaining 9.1% to $944 per teu.
However, spot rates from Asia to the US ticked down marginally this week, with rates for the US west coast declining 5.1% to $1,382 per 40ft, and falling by 3.1% for east coast ports to $2,240 per 40ft.
Overall, the SCFI comprehensive index moved ahead to 797.62 points, which compares with its all-time low in March this year of 433.46.