Spot container rates continue to slide

Ocean carriers are looking to reverse the negative trend with general rate increases and capacity adjustments.    Spot container shipping rates as reported by the Shanghai Shipping Exchange continued to fall last week.
   The Shanghai Containerized Freight Index, which is based on estimates by panelists of spot shipping rates from Shanghai to 15 regions of the world, fell over 4 percent to 556.72 from 581.25 as of Friday.
   Components of the index, which are quoted in terms of dollars per 20-foot or 40-foot container, were down on 11 of the 15 trades.
   The spot rate from Shanghai to Northwest Europe fell $38 to $205 per TEU; from Shanghai to the Mediterranean fell $38 to $274 per TEU; from Shanghai to the U.S. West Coast fell $73 to $1,268 per 40-foot container (FEU); and from Shanghai to the U.S. East Coast fell $100 to $2,904 per FEU.
   In response to the tumbling rates, many carriers have announced plans for hefty general rate increases for July 1.
   Members of the Transpacific Stabilization Agreement, for example, announced plans for a $600 per FEU increase on July 1 and a $400 peak season surcharge on top of that. TSA members include APL, China Shipping, CMA CGM, COSCO, Evergreen, Hanjin, Hapag-Lloyd, Hyundai, “K” Line, Maersk, MSC, NYK, OOCL, Yang Ming, and ZIM.
   Ocean carriers are also adjusting capacity in response to weak demand.
   Maersk and MSC also have reduced the size of ships deployed on their joint AE9/Condor between Asia and North Europe service and CMA CGM said last week it would implement a blank sailing program on the trade. 
   Alphaliner reported last week that in the first six months of this year, voyage cancellations have reached an all time high of 10 percent, and suggested removal of at least four Far East to North Europe strings “is required to address the current supply-demand imbalance on the trade.”