Transpacific and Asia-Europe spot rates to continue decline

THE Asia-Europe rate on Shanghai Containerised Freight Index dropped to US$1,114 per TEU at the end of last week, down $56 on the previous week, while rates for transits to the Mediterranean fell $34 to $1,082 per TEU.

Transpacific rates dropped to $1,737 per FEU in the same period, off $46 from the week earlier for Shanghai-LA transits with rates from China to the US east coast falling $55 to $2,956 per FEU.


In response, carriers have levied rate increases and surcharges. Hanjin announced rate hikes of $200 per TEU on services from the Far East and south east Asia to North Europe and the Mediterranean from next month. Cosco recently imposed a $300 Asia-Europe rate hike, plus a bunker surcharge and an equipment "imbalance fee".


Add to that, the Canadian Transpacific Stabilisation Agreement has put in a bunker surcharges, as have lines with the Asia Australia Discussion Agreement and the Asia New Zealand Discussion Agreement and MSC has announced rate increases for US exports to Asia from next week for US Asia-bound Cargo.


A source at London`s FIS, a seller freight futures, was quoted by London`s International Freighting Weekly as saying: "With most major contracts on the Asia-Europe trade settled months ago, shippers will be watching this fall of rates with heavy hearts, having signed 12-month deals at higher levels late last year.


"If rates continue to fall, how long will it be before shippers begin to revisit their contracts asking for better rate levels, and should capacity be restricted by carriers to push rates back to profitable levels - as was the case in 2010 - will cargo owners once more be forced to bear a wave of surcharges and `top-up fees` to see their cargo successfully loaded?" the FIS source told IFW.