Spot container rates continue falling

The Shanghai Shipping Exchange shows spot rates to Europe at low of $399 per TEU.    Spot container shipping rates as published by the Shanghai Shipping Exchange dropped on major routes Friday.
   Rates fell by $67 to $399 per TEU for shipments from Shanghai to ports in Northwest Europe and by $67 to $540 per TEU for ports on the Mediterranean, according to estimates by the panelists who help create the Shanghai Containerized Freight Index.
   Richard Ward, a container freight analyst at FIS in London, noted these are new lows, and said “after last week’s failure to increase rates via a planned GRI (general rate increase) carriers have stuck to past performance and have announced additional GRIs from May 1.”
   Rates also fell in the eastbound transpacific trade despite a $600-per-40-foot container GRI that was announced by the Transpacific Stabilization Agreement, effective April 9.
   The rate from Shanghai to the U.S. West Coast was down $309 to $1,623 per FEU (the exchange quotes rates from Shanghai to the United States using 40-foot rather than 20-foot equivalent units), while the rate to U.S. East Coast ports was down $356 to $3,701 per FEU.
   Ward said some carriers are announcing large general rate increases in the Asia-Europe trade, describing one announcement as “nothing short of ludicrous. Even more telling is that carriers are unable or unwilling to manage supply for a long enough duration that would help them to prop up rates for a prolonged period of time.
   “Instead, their preferred strategy is to combine ad-hoc sailing cancellations with GRIs, which only affect pricing for a limited time period and offer no significant or long term relief,” he said, adding “it is well understood – in the swaps market at least – that since carriers are unable to control supply in a meaningful way, they have little or no control over pricing.”