Spot container rates decline on major trades

Rates from Shanghai to Northwest Europe, the Mediterranean and the United States have declined for the past two consecutive weeks.    Spot container rates as published in the Shanghai Shipping Exchange’s Shanghai Containerized Freight Index, which includes spot rate estimates from Shanghai to 15 regions around the world, declined from a reading of 641.51 last week to a reading of 544.33.
   Since last week, rates from Shanghai to Northwest Europe fell from $674 per TEU to $409 per TEU, while rates from Shanghai to the Mediterranean dropped from $646 per TEU to $406 per TEU.
   Rates on both trades have declined for the past two consecutive weeks, with rates from Shanghai to Northwest Europe down 58.6 percent from two weeks ago and rates from Shanghai to the Mediterranean down 49.5 percent from two weeks ago.
   On the Asia to North Europe trade, last week saw the largest decline ever recorded on the trade in dollar terms, while this week saw the largest decline ever on the trade in percentage terms, Richard Ward, a container derivatives broker at Freight Investor Services said.
   “This year, rates have declined by more than $150 in a single week on 10 occasions,” Ward said in a statement. “Previously, since the launch of the SCFI in 2009, such large weekly rate declines had only been witnessed four times on the trade, suggesting worsening rate volatility and continued weakness on the trade.”
   “Such large weekly rate declines have been exacerbated by forwarders providing quoted rates to shippers that have yet to be secured with a carrier, resulting in an added requirement to force the market down to meet the pre-arranged unsecured rate,” he added. “Such risk in the market is not uncommon, however forwarders should at least be referring to the forward curve in such instances to better understand the risk involved and how it could be reduced whilst still wining new physical business.”
   Since last week, rates from Shanghai to the U.S. West Coast fell from $1,102 per forty-foot container (FEU) to $1,009 per FEU, while rates from Shanghai to the U.S. East Coast fell from $2,015 per FEU to $1,834 per FEU.
   Rates on both trades to the U.S. have declined for the past two straight weeks, with rates from Shanghai to the U.S. West Coast down 26.0 percent from two weeks ago and rates from Shanghai the U.S. East Coast down 22.1 percent from two weeks ago.