The World Container Index (WCI) has confirmed that the price increases of US$445 to $500 per 20-foot-equivalent unit (TEU) announced by container shipping lines for the Asia-Europe container trade from September 1 were “not accepted by the market,” said Drewry.
The weekly World Container Index’s Shanghai-Rotterdam freight rate assessment increased just $18 to $2,498 per 40-foot box last week, bringing to an end a series of successful attempts by ocean carriers to increase freight rates on the trade lane.
“With second quarter financial results showing mixed levels of profitability, many carriers must have hoped that price rises towards the end of the peak season would help to shore up their balance sheets,” said Richard Heath, director of World Container Index. “Spot rates also have a significant influence on the outcome of contract rate negotiations which for many shippers on the Asia-Europe trade will be taking place in the fourth quarter.”
Some carriers have already announced mid-September GRIs in recognition of the recent failed attempt to lift rates.
“National holidays in China starting at the end of September may create a small demand spike,” said Martin Dixon, research manager of freight rate benchmarking at Drewry. “However, if this does not materialize, there may be few other opportunities for carriers to increase rates in 2013.”
Drewry stressed that week-to-week increases in rates are less significant than how long the increase holds for.
Year-to-date average rates for the Asia to Europe trade are still some way below the average for 2012, and although recent increases on the trade have been broadly successful, rates have declined by about $400 per 40-foot container in the last four weeks, the London-based maritime research firm noted.
The WCI is a 50-50 joint venture between Drewry and Cleartrade Exchange that reports individual market prices on major East-West container shipping routes.