TAC Index will provide air freight rate transparency – and looks ahead to financial markets
Shippers and forwarders can now access a real-time spot market air freight rates, as well as the possibility ...
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By Mike Wackett
BIMCO is the latest container shipping industry association to paint a gloomy picture of low demand on normally high-volume trades, being exacerbated by a record influx of newbuild tonnage.
“As volumes drop and new ships are introduced on a weekly basis, it is even more difficult to strike the balance that will see freight rate improvements,” said BIMCO, citing the lack of European demand as a particular “concern”.
Looking beyond the Shanghai Containerized Freight Index (SCFI), which records average spot rates only ...
Comment on this article
Ed Evans
October 13, 2015 at 12:58 pmThe SCFI does more than record the spot prices from China to Europe – it is a global measure greatly disliked by those wishing to drive up the spot price for container shipments from Asia.
The CCFI has its own issues, but is in less disfavor with the lines, due largely to its use of contract rates as well. Both the CCFI and SCFI are useful to shippers, giving firms such as mine a negotiating position of greater strength than otherwise. The indices should provide shipping lines with visibility that is not legally available through discussions with competitors.
Can you spell anti-trust?
Mike Wackett
October 14, 2015 at 7:16 amHi Ed,
The story should have been clearer in the use of ‘only’ for the SCFI which in this instance referred to only one Chinese gateway port and the exclusion of contract rates from the index.
In addition to the two European and US tradelanes the SCFI records average spot rates across 11 other routes from Shanghai.
Alphaliner reported yesterday that spot rates to the Med have fallen below $100 per teu and to $50 per teu for South America – which cannot be a healthy situation for carriers or shippers in the long-term.
Ed Evans
October 14, 2015 at 12:11 pmI agree that the prices are unsustainable. Conspiracy is not the way to fix the problem, though. It takes the lines’ refusal to lose money on spot freight for any pricing increase to be effective. Vessel delays and cancellations could help some, but if there is ‘leakage’ among carriers who just want vessel utilization to go up, the prices will stay down. Conspiracy will lead to greater losses in the end, see current air freight and ro-ro price-fixing issues.
Richard Ward
October 14, 2015 at 3:52 pmInsightful comments Ed and I totally agree. Carriers have had over 5 years to deal with the greater transparency that such indices provide to shippers, however I wonder how many of them have embraced new tools to meet the changing environment?