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Ocean carriers that have reluctantly learnt to live with the weekly publication of the Shanghai Containerized Freight Index (SCFI) – which has become a bellwether for freight rates in the liner industry – have a welcome week off from the relentless rollercoaster rate ride this week due to public holidays in China.

Although the SCFI only records average spot freight rates for containers shipped from the world’s largest container port, some lines have criticised it for “adding fuel to the fire” of freight rate volatility.

Container lines would prefer an increased focus on the Shanghai Shipping Exchange’s other index, the CCFI (China Containerized Freight Index), which collects data from carriers from a range of Chinese ports, based on both spot and contract rates.

Several Asia-Europe shippers have also told The Loadstar they have struggled to keep up with the wild swings in rates in the trade in the past few years.

They argue that although there are short-term gains when rates are falling, the lack of validity to the rate and the threat from recent monthly $1,000 per teu general rate increases (GRIs), underpinned by the late cancelling of sailings, has created an uncertainty that is unhealthy for their business.

Nevertheless, the combination of an oversupply of capacity and a downturn on many trades has made Asian exports a buyers’ market for the past six months, leading to weekly falls in the SCFI that carriers have been unable to arrest with the implementation of GRIs.

After four consecutive months of mixed success with GRIs on the Asia-Europe trades, freight rates on both Asia to North Europe and Asia to the Mediterranean are in a sorry state.

So the absence of the SCFI this week, due to China’s Golden Week holiday, comes as a welcome respite to carriers concerned at how much lower rates could fall from last week’s $313 per teu for both trades. With industry fundamentals very weak it is difficult to see where good news on rates will come from.

Spot rates between Asia and North Europe are some 62% lower than in the same period of 2014, when a better-than-expected peak season boosted carriers’ revenues. According to London container derivatives broker FIS, spot rates on the route fell by a massive 59% in September.

It said: “Even more worrying from a carrier perspective is that rates are fast approaching, if not already into, negative [profit] territory for the second time in less than six months.”

The “curse” of the SCFI may have an even greater impact on carriers’ top lines – with average rates so low FIS asked whether “large beneficial cargo owners will stick with their traditional yearly contracts, given that spot-paying customers were at times outperforming some of the very largest BCO contracts?”.

This trend might be mitigated by what appear to be very low contract rates currently being offered shippers.

“Reports already suggest that first-quarter 2016 rates of around $600-$700 per feu are being bandied about on the Asia-Europe trade,” FIS added.