Rates on all the major trade lanes experienced substantial increases last week, as the August general rate increases came into effect.
The latest Shanghai Containerised Freight Index shows that spot rates on the Asia-Europe trade jumped 20.9%, or $252, to $1,455, representing their highest level since February and the first rise in rates since the first week of July. Meanwhile, rates to the Mediterranean increased 10.2%, or $149, to $1,608.
However, Freight Investor Services broker Richard Ward believes rates could climb even further in the coming weeks, as reports suggest that as much as $3,000 per feu is currently being quoted by carriers on the Asia-North Europe trade.
“Whether this comes to fruition will depend on how quickly carriers begin discounting rates. However, given the apparent lack of spare capacity due to the peak season, one would expect that the level of discounting will be less aggressive than it has been historically after a successful GRI,” said Mr Ward.
“With some carriers still posting substantial losses for the quarter, despite the relatively high spot market, lines will be hoping that this most recent GRI can be sustained for an increased length of time,” he said.
Freight rates on routes from Shanghai to the east coast of the US saw the most dramatic rise this week, according to the SCFI.
Following confirmation by Transpacific Stabilization Agreement shipping lines earlier this month of a $600 GRI per feu from August 1, rates surged $609 to $4,187, the highest level ever recorded since the inception of the SCFI.
Rates between the US west coast and Asia are up to their highest since the month of April, increasing $433 to $2,198 per feu.
The implementation of the August GRI on the major trades meant that the SCFI comprehensive index rose to its highest since March 2013. Last week’s index closed at 1195.36 points, a rise of 12.7% over last week.
Drewry’s Hong Kong-Los Angeles container freight rate benchmark remained unchanged last week at $1,800, down 15.7% on the $2,136 recorded this time last year. However, unlike last week’s SCFI, it does not include the August 1 GRIs.
Upon their implementation this week, Drewry expects rates to rise briefly if supported by strong peak season volumes and if west coast port operation continues to remain uninterrupted.