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Container spot rates between Asia and Europe fell again this week, sinking to a level of around 50% of their value at the beginning of the month.

Today’s Shanghai Containerized Freight Index (SCFI) shows a 10.4% drop for North Europe to $691 per teu, while spot rates for Mediterranean ports slumped by 15% to $594 per teu.

This represents the third consecutive week that the SCFI has recorded declines in spot rates for Europe, after 1 August GRIs and minimum FAK (freight all kinds) announcements lifted rates by over 50% at the start of the month.

Indeed, by next week the market could have given up all of its gains from the 1 August spike, in the midst of the peak season months that should be the strongest trading period of the year for ocean carriers.

In the Maersk Group H1 interim results presentation last Friday, CEO Soren Skou said the recent improvement in spot rates had been “positive momentum” that he suggested gave “hope for the third quarter”.

However, the decline of the SCFI in the past two weeks will be a double hammer blow for the financial recovery of Maersk Line and its higher-loss-making rivals.

Moreover, the carriers are sourcing more and more of their bookings from the spot market, due to the fact that both shippers and carriers walked away from signing annual contracts for 2016, because of the extreme volatility of the market.

Mr Skou revealed last week that the ratio between contract and spot rates for Maersk Line was now roughly 50:50.

Now the attention of the carriers must again focus on the next round of GRIs and FAK minimums, stemmed for 1 September.

Along with similar notifications from its peers, OOCL announced today the next chapter of its so-called “rate restoration programme” for Asia-Europe, increasing rates by $900 per teu to all European destinations.

With the 1 September rate hikes, the Asia-Europe carriers probably have one last chance to salvage some profitable weeks from what is fast turning into a disastrous year – the worst since 2009.

Indeed, Drewry predicts that collectively the industry could end the year sailing in a $5bn sea of red ink. And, judging by the H1 results published so far, this looks like a conservative estimate.

As the year progresses, the carriers will have no option but to cancel voyages to improve the supply/demand balance and halt the slide of rates.

This week, Hapag-Lloyd started the ball rolling, announcing that, as part of its “vessel maintenance scheme”, the Grand Alliance would be voiding four voyages on the EUM, Loop 5 and Loop 7 services, in early October as the Hapag-Lloyd vessels were dry-docked.

Elsewhere, spot rates on the transpacific edged down 5.4% for the US west coast, to $1,159 per 40ft, and by 4.2% on the east coast, to $1,694 per 40ft.

Spot rates on the transpacific have been much less volatile than on Asia -Europe, but the real problem for carriers plying the tradelane is that annual contract rates were reset at a very low level in May.

Mr Skou said last week that recent spot rate increases on the transpacific had been “wiped out” by the extremely low level of contract rates.

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