Container rates on three of the four main global trade lanes picked up last week and the shipping sector is hopeful that prices will continue to increase.
According to the Shanghai Containerized Freight Index (SCFI), all-in spot rates on services from Shanghai to the US west coast increased by US$111 per feu last week, compared with the previous week, to reach $1,843 per feu. Prices to the US east coast jumped $143 per feu to reach $3,209 per feu.
Over the same period, prices to Europe from Shanghai slipped to $919 per teu, compared with $925 the previous week, but prices to the Mediterranean climbed $1 per teu to hit $914.
Although rates on the Asia-Europe trade were down last week, the rate of decline has slowed from the level registered at the end of April.
David Barnes, a container freight derivatives broker at Clarkson Securities, said: “While the high levels of [bunker surcharges] continue to play a part in supporting rates [on Shanghai to Europe and the Mediterranean] we note that there is an increasing amount of positive talk beginning to emerge, pointing to the market picking up as we move into Q3.
“Of course, there are caveats to this: that the carriers make headway in getting general rate increases to stick later this month; and also that demand picks up enough to warrant a peak season surcharge.”
He expected the “very strong” increases seen on the US trades last week to continue.
But he added: “While the Panama Canal poses size restrictions for the US east coast trade, together with bunker adjustment factor increases – which are likely to see the trade more buoyant into the peak season – there are comments from US clients that tonnage remains oversupplied for the west coast, and we may see a flatter development there as we move into the peak season.”
While the price increases noted on the US trades may seem impressive, they lag behind the general rate increases the carriers recommended in November.
The Transpacific Stabilisation Agreement (TSA) – a carrier organisation that recommends rate increases on the eastbound US trades – recommended rate hikes of $400 per feu on eastbound transpacific trades to US west coast ports from 1 May.
It also called for a rate increase of $600 per feu on all other destinations, full recovery costs of other equipment sizes and stricter collection of fuel charges, as well as Panama Canal, Alameda Corridor and other fixed access charges.
The TSA also recommended a peak-season surcharge of $400 per feu from 15 June through to 30 November.
Damian Brett | Tue, 10 May 2011, IFW News