Ocean container rates still on the decline

Wednesday, 25 August 2010

Global ocean container rates fell last week and forwarders say shipping lines are starting to look to guarantee cargo for after the peak season, writes Damian Brett.

For the week ending 20 August, the global Shanghai Containerised Freight Index, which is based on rates for 15 different destinations from Shanghai, dropped 13.46 points on the previous week to reach 1,513.60.

The index showed that all-in spot rates on services to European ports last week dropped by US$20 per teu on a week earlier, to reach $1,847.

Over the last four weeks, westbound Asia-Europe rates have dropped $43 per teu, according to the index.

One forwarder said that in Asia, carriers already appeared to have started to cut prices and offices in Europe would soon follow suit.

“The carriers are now openly saying they won’t get another increase in this year, let alone the next month or so,” he said.

“I think you are going to see rates coming down – maybe not immediately, but in the next couple of weeks

“Rates being offered to bigger importers seem to have dropped already by a couple of hundred dollars.
“It’s got to the point where we are pushing our people in China for cheaper rates, because a few people have got them and, to stay at the top of the market, we need to get them as well.”

Another contact said shipping lines were reducing rates in order to secure cargo after the peak season.

There have also been other signs that the market may be starting to turn, as carriers have been extending the period that rates are valid and they have also been saying they expect rates to decrease before the end of the year.

According to the index, rates on services to US west coast ports dropped by $13 to reach $2,752 per feu, to east coast ports by $11 to $4,139 per feu and to the Mediterranean by $10 to $1,819 per teu.

None of the 15 routes listed on the index posted an increase in rates last week, although services to Japan stayed at the same level and those to to Hong Kong fell just $1.

The biggest fall in price was on services to East and West Africa, which were down $34 at $2,407 per teu.