Spot container rates fall 4.2%

Rates from Asia to Northwest Europe and the Mediterranean have dropped for the past five consecutive weeks.    The Shanghai Shipping Exchange’s Shanghai Containerized Freight Index (SCFI) said today rates fell 4.8 percent from last week’s reading of 591.51 to a reading of 566.92. The overall SCFI includes spot rate estimates from Shanghai to a total of 15 different regions around the world.
   Since last week, rates from Asia to Northwest Europe fell 8.1 percent, from $469 per TEU to $431 per TEU, while rates from Asia to the Mediterranean dropped 7 percent, from $488 per TEU to $454 per TEU. Rates on both of these trades have deteriorated each week for the past five weeks.
   However, Japanese container carrier “K” Line plans to increase rates from Asia to Europe and the Mediterranean by $1,000 per TEU, while reports indicate NYK will increase rates from Asia to Europe by $900 per TEU, Richard Ward, a container derivatives broker at Freight Investor Services said. These increases will take effect March 1. 
   Since last week, rates from Shanghai to the United States West Coast fell 4.8 percent, from $1,388 per forty-foot container (FEU) to $1,321 per FEU, while rates from Shanghai to the United States East Coast dropped 5.1 percent, from $2,466 per FEU to $2,341 per FEU.
   The low rates, which reflect the challenging environment carriers face, have also been reflected in their financials, Ward explained.
   OOCL, for example, saw revenues decline 15.6 percent year-over-year in the fourth quarter of 2015. On the Asia-Europe trade alone, the Hong Kong-based ocean carrier’s revenues tumbled 35.6 percent from the fourth quarter of 2014.
   “It’s clear that over the past 12 months the negative impact of cascading is having a real impact on the carriers’ financials,” Ward said. “The market will now be eagerly waiting to see how worsening market conditions impact the market leader Maersk Line, which will release its results on Feb. 10.”