Container spot rates continue to tumble

Components of the Shanghai Containerized Freight Index declined on four major trade routes from Shanghai to the U.S., Europe and the Mediterranean.    Container spot rates continued to fall this week, according to estimates made by industry panelists for the Shanghai Shipping Exchange. Components of the Shanghai Containerized Freight Index declined on four major trade routes from Shanghai to the U.S., Europe and the Mediterranean.
   Rates from Shanghai fell by $79 to $1,447 per 40-foot container (FEU) to the U.S. West Coast; by $100 to $3,116 per FEU to the U.S. East Coast; by $58 to $284 per 20-foot containers (TEU) to Northwest Europe; and by $87 to $379 per TEU to the Mediterranean.
   Richard Ward, an analyst at Freight Investor Service asked in his weekly commentary, “How low will it go?”
   He noted the overall SCFI index, which measures rates on routes out of Shanghai to ports around the world, has fallen 25 percent in the past two weeks. Outside of the major east-west trades, rates to Santos also reached a new all-time low after falling $71 to $389 per TEU.
   Referring to Maersk’s announcement earlier this week that it has ordered a 11 large container ships, Ward said, “With such ships destined for the Asia-Europe trade it does not look like carriers are prepared to abandon ship in what is surely becoming a survival of the fittest. The long term outlook for those carriers with weaker balance sheets does not bode well given the long term downward trend in rates that will surely continue.”