Drewry Shipping reports double-digit drops in Asian freight rates

Drewry Shipping reports double-digit drops in Asian freight rates    Drewry Shipping Consultants, a maritime consulting firm based in London, said liner trades from Asia during the off-peak months of January and February witnessed double-digit freight rate decreases.
   Drewry has established a pricing database to provide transparent, frequently updated market prices by gathering freight rates from freight forwarders between port ranges or port pairs every week, month or two months, depending on the route.
   Highlights of Drewry’s Container Shipper Insight report are:
   * The Hong Kong-to-Long Beach spot freight rate, a key pricing benchmark in the transpacific trade, declined 13 percent to $1,600 per 40-foot container for low-cost carriers in the year to late February.
   * Rates from China to Northern Europe and the Mediterranean fell 14 percent and 10 percent, respectively, with cargo in some cases moving from Hong Kong to Europe for as little as $750 per container.
   * All-in outbound freight rates from Europe and from the U.S. remain at $1,302 and $1,236 per 40-foot container, respectively, “due to the structural imbalance of export and import cargoes in the main trade routes of both regions,” Drewry said.
   * Freight rates in the outbound trade from the U.S. West Coast to South China and Hong Kong hover at about $1,000 to $1,100 per 40-foot box.
   * Freight rates from Europe to the U.S. East Coast remained high in January, at about $2,800-$3,200 per 40-foot container, as the market was experiencing tight capacity. Eastbound transatlantic rates, though, were still low in January.
   * Drewry forecasts that service contract all-in freight rates in the Asia-to-North America trade will decline 10 percent overall this year, despite higher bunker surcharges.
   “Our information shows the ongoing erosion of freight rates over many weeks during the current off-peak season,” said Philip Damas, lead researcher of the Drewry Container Shipper Insight. “These signs of temporary market weakness, combined with the prospect of lower vessel utilization, tell us that shippers should be able to secure more permanent reductions in freight rates in the main trades.”
   In a separate study, Drewry’s said the average percentage of on-time arrivals for liner vessels was just 57 percent while monitoring 1,070 vessel arrivals during December 2005 and January 2006.
   “The transpacific route stands out as one of the most reliable routes, with 65 percent of ships arriving on time, and an average deviation of just 0.7 day. The transatlantic and Europe/Africa trades, in particular, lag behind in their average reliability results. The average deviation from the expected arrival day can be more than two days for some liner services,” Drewry said.
   “This highlights that average deviations from the ‘best case scenario’ transit times should be taken into account when planning supply chains,” Damas said.