Spot container rates rise for second straight week

Rates from Shanghai to Northwest Europe and the Mediterranean have increased dramatically in the past two weeks, but rates from Shanghai to the United States have fallen three weeks in a row.    Spot container rates as measured by the Shanghai Shipping Exchange’s Shanghai Containerized Freight Index (SCFI) increased for the second straight week in a row to a reading of 718.97, up from last week’s reading of 690.38. The overall SCFI includes spot rate estimates from Shanghai to a total of 15 regions around the world.
   Since last week, rates from Shanghai to Northwest Europe rose from $591 per TEU to $763 per TEU, the second consecutive week in a row rates on the trade have increased, now up 66.7 percent from two weeks ago.
   Rates jumped as a result of planned Sept. 1 general rate increases, Richard Ward, a container derivatives broker at Freight Investor Services in London said. Despite the increase, the increase might be disappointing for carriers, given their attempts to increase rates by around $1,000 per TEU, explained Ward. As a result, several big name carriers are implementing additional general rate increases this month.
   “The danger for carriers is that rates cannot be increased to sufficient levels ahead of annual contract negotiations, potentially leaving them exposed to significantly lower annual rates with the added danger that spot levels will fail to offer any upside given the continued weak demand and oversupply,” Ward said.
   Since last week, rates from Shanghai to the Mediterranean rose from $697 per TEU to $865 per TEU. This is the second straight week in a row rates on the trade have increased, now up 92.7 percent from two weeks ago.
   Rates from Shanghai to the U.S. West Coast dropped from $1,481 per 40-foot container (FEU) to $1,456 per FEU, while rates from Shanghai to the U.S. East Coast dropped from $2,733 per FEU to $2,672 per FEU since last week. This is the third consecutive week in a row rates from Shanghai to the U.S. have dropped, now down 15.3 percent and 15.4 percent from three weeks ago, respectively.