Asia-Europe GRI Falters Amidst Soft Market Conditions
The World Container Index’s Shanghai-Rotterdam freight rate assessment increased just $18 to US$ 2,498 per 40ft box, today, which brought to an end a series of successful attempts by ocean carriers to increase freight rates on the Asia-Europe container trade.
The weekly World Container Index assessed by Drewry, which captures freight rates with a contract validity of up to one month, confirmed today that the price increases of $445-$500 per teu announced by container shipping lines from 1st September were not accepted by the market.
World Container Index Shanghai-Rotterdam Benchmark (US$/40ft)
“With second quarter financial results showing mixed levels of profitability, many carriers must have hoped that price rises towards the end of the peak season would help to shore up their balance sheets,” said Richard Heath, director of World Container Index. “Spot rates also have a significant influence on the outcome of contract rate negotiations which for many shippers on the Asia-Europe trade will be taking place in the fourth quarter.”
Some carriers have already announced mid-September GRIs in recognition of this week’s failed attempt to lift rates.
Martin Dixon, research manager freight rate benchmarking at Drewry, added: “National holidays in China starting at the end of September may create a small demand spike. However, if this does not materialise there may be few other opportunities for carriers to increase rates in 2013.”
Drewry stressed that week-to-week increases in rates are less significant than how long the increase holds for.