Transpac rates slip on over-supply concerns, but bunker surcharges stick

TRANSPACIFIC rates have dropped on over-capacity concerns after a series of gains, according to the Shanghai Containerised Freight Index (SCFI).

Rates for an FEU from Shanghai to the US west coast fell US$22 to $1,819 for the week ending May 20, reported London`s Containerisation International. While an FEU from Shanghai to the US east coast declined $29 from week to week to $3,188.


Drewry`s Hong Kong to Los Angeles benchmark for an FEU showed rates levelling after a series of increases with its latest spot rate at $1,953 being unchanged for three weeks, but still down 10.8 per cent year on year.


Charles De Trenck, analyst at Hong Kong-based Transport Trackers, told London`s Containerisation International: "Rates ex fuel have not really risen. It is believed there was some success on implementing floating bunker surcharge but that rates drifted down. I am tracking volumes which are not doing that great."


Agreeing, Paris-based Alphaliner said: "Transpacific rates have remained weak, despite some recent strengthening in the spot rates. The 2011-12 contracts implemented in May are understood to have been concluded at rates below those signed last year. This will have a negative impact on a carrier`s bottom line for the rest of the year, as the vast majority of transpacific volumes are moved on contract, with only a small percentage of cargo moved on spot rates."


Alphaliner also said capacity provisions on the Far East to North America routes are running 19 per cent higher year on year, and that with demand expected to grow seven to eight per cent this year while "over-supply persists for the next few months".