Shippers pushed towards spot rates as contract negotiations stall
While container spot rates on the Asia-Europe and transpacific tradelanes appear to have reached a ...
Asia-Europe ocean carriers will be disappointed with the impact on container spot rates of the impending $1,000 September 1 general rate increases they had attempted to underpin by more blanked sailings and the belated removal of one 2M service string.
Today’s Shanghai Containerized Freight Index (SCFI) for North European and Mediterranean ports records an uptick of $122 per teu and $248 per teu respectively, lifting Asia-North Europe spot rates to $591 per teu and Asia-Mediterranean rates to $697 per teu.
August saw a $400 per teu spike in spot rates to North Europe in the first week of that month’s GRI – also around $1,000 per teu – but in the following weeks this was ‘given back’ to shippers, again against a backcloth of a non-existent peak season.
Analysts expect the influence of the September GRI to be short-lived, as cargo demand falls sharply again in October ahead of China’s Golden Week holiday.
Meanwhile, according to Alphaliner, ocean carriers have cancelled 75 sailings from Asia-North Europe already this year, compared with only 28 blanked voyages over the January-August period of 2014. However, it said that there is still 2.3% more capacity on the tradelane due to the deployment of an armada of bigger ships in place of incumbent smaller tonnage.
Moreover, demand on the headhaul route fell by 3.5% in the first six months of the year, versus 2014, and the indications are that this could weaken further as China’s exports tanked by a year-on-year 8% in July.
It is difficult to see what other options carriers have than to cancel even more sailings to Europe and consider temporarily laying-up some of the big ships until trade recovers.
The financial outlook for container lines plying the world’s biggest tradelane in the second half of 2015 cannot be encouraging. “Satisfactory” results at the H1 stage posted by several carriers were only achieved due to a stellar performance in the first quarter.
The only saving grace for carriers is that bunker fuel prices have fallen again, to below $200 per tonne, bringing unit cost down further, but the weakness of oil is also a symptom of the uncertainty sweeping commodity markets, which is bad news for global trade.
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