Gains in Asia/Europe box rates are regressing
20- November - 2012

RATE GAINS on Asia/North Europe box routes are regressing, with analysts predicting that general rate increases for November will prove unsustainable.

 For the second consecutive week, Asia/North Europe rates showed declines on the Shanghai Containerised Freight Index and Drewry’s World Container Index. The SCFI showed a $158 decline to $1,225 per teu, while the WCI showed a $127 loss to $2,675/feu. 

Other long-haul routes did not fare well. The Asia/Mediterranean rate lost $99 to $856/teu on the SCFI, while the WCI posted a $127 drop to $1,774/feu. 

As for trans-Pacific routes, the Asia/US West Coast rate dropped $86 to $2,224/feu on the SCFI, while the WCI registered a $119 drop to $2,232/feu. 

The Asia/USEC rate dropped $73 to $3,246/feu on the SCFI, while the WCI showed a $66 drop to $3,228/feu. 

Although carriers have acted to cut sailings while implementing GRIs, demand is also dropping in tandem, Clarkson’s noted: “Whilst capacity is set to decrease on the Asia-Europe trade during December, so is demand, and it is currently hard to see any successful GRI being long lived given the proximity of the Christmas holidays.” 

Meanwhile, ACM/GFI said feedback from industry players is that rates for contracted volumes could be lower in 2013, as carriers fight for cargoes to get through another weak year for the eurozone. 

ACM/GFI said: “Speaking to a number of industry participants this week, 2013 rates offered in the first round of negotiations are aggressively low, versus spot rates.” 

It added: “After factoring in volume discounts, we all know that there is room for rates to go lower. It seems like carriers are yet again trying to secure the necessary volumes to see them through another stagnating year in the euro area.” 

Last month the IMF reduced projections for the Euro area to -0.4% for 2012 and took a cut of -0.5% to the 0.2% growth expected in 2013, explaining why carriers are trying to get as much fixed volume business for next year. 
© 2012 IHS Global Limited


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