Weak peak season Carriers have more Transpac capacity growth than cargo

CARRIERS have expanded capacity faster than the growth in cargo volume and this has led to a fall of transpacific freight rates for 11 weeks in a row, hitting a trough since May 7.

The Shanghai Containerized Freight Index (SCFI) average spot rate to the US west coast declined 2.9 per cent to US$2,493 per FEU as at September 17 from the week before, reported, reported Newark`s Journal of Commerce. That was down $74 from the past week, marking the biggest contraction in the index this year.


The Shanghai Shipping Exchange said the average spot rate for all-water service to the US east coast also decreased $68 or two per to $3,959 per FEU cent as of September 10.


But average spot rates are still higher than they were on October 16, 2009. The US west coast rate was up 75 per cent from the spot rate of $1,431 last October, and the east coast rate was up 63 per cent from the rate of $2,439 as at October 16 last year.


The Drewry Container Rate Benchmark, a measure compiled by Drewry Shipping Consultants, also shrunk 2.1 per cent to $2.493 per FEU as at September 20 from the previous week, recording the seventh consecutive decline in the Drewry index for shipments from Hong Kong to Los Angeles. This left the measure down $244 since August 1 when some carriers started to impose a peak season surcharge.