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SCFI: Asia-Europe spot rates slide ahead of new February GRIs

HONG KONG — On the eve of a host of planned general rate increases, Asia-North Europe spot rates tumbled 8.2 percent this week, shedding most of the sharp gains made since mid-January, according to the latest reading of the Shanghai Containerised Freight Index (SCFI),reports JOC.

The spot rate fell to $1,153 per 20-foot container, dropping $103 to a level 28 percent lower than during the same week last year.

Several carriers have new general rates increases (GRIs) and peak season surcharges in the pipeline as they prepare for the Chinese New Year rush. January and early February this year is the peak period for shippers importing products for the Easter and early summer sales.

Evergreen will implement a GRI of $400 per TEU effective Feb. 1 along with Hanjin, which will also increase rates at the start of the month via a peak season surcharge of $300. Hamburg Sud will implement a peak season surcharge of $300 per TEU from Feb. 2, while Maersk will push through a GRI of $400 per TEU on Feb. 1.

The Asia-Mediterranean spot rates were basically flat, falling $33 to $1,427 per TEU, although that price is 12.6 percent lower than during the same week last year, the SCFI stated.

Spot rates on the Asia-U.S. West Coast continued to fall after member carriers of the Transpacific Stabilisation Agreement (TSA) attempted to impose GRIs of $600 per 40-foot container on Jan. 15. The rate lost $84 to $1,979 per FEU, a drop of 4 percent.

Like the carriers on the Asia-Europe trade, the TSA lines also plan to levy a Chinese New Year GRI. It will again be $600 per FEU and will be imposed on Feb. 6, applying to all origins and destinations. According to the TSA, the Feb. 6 increase is intended to ensure that carrier costs are adequately recovered coming out of the slower winter season.

“This is a very challenging operating environment for transpacific container lines,” said TSA executive administrator Brian Conrad, “and it is critical to maintaining service levels that they not leave money on the table during the Lunar New Year period.”

There is no sign of an end to the port chaos that has plagued the U.S. West Coast for months, with indications that the situation is actually worsening. The Marine Exchange of Southern California reported Jan. 28 that 17 container ships were at anchor and awaiting berths in Los Angeles-Long Beach. Oakland reported that five container ships waiting at anchor, and Tacoma reported six at anchor.

According to Paris-based consultancy Alphaliner, vessels have been thrown off schedule by as much as three weeks, forcing carriers to add 36 additional ships to their trans-Pacific rotations to the West Coast. Furthermore, some carriers are running “extra-loaders” on all-water services to the East Coast. These unscheduled, single-voyage vessels carry cargo that would otherwise have moved through the West Coast.

Ports in Canada and on the Eastern Seaboard are beneficiaries of the West Coast waterfront mess, and although the SCFI reading shows spot rates falling by 1.3 percent to $4,683 per FEU on the Asia-U.S. East Coast trade this week, the throughput numbers are all heading in the other direction.

While container volume at Los Angeles-Long Beach declined 1 percent in December compared to December 2013, the East Coast gateways and Canada’s Prince Rupert reported double-digit growth.

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