Container Freight Rates Fell Over 32% This Week on Key Route

By Ole Mikkelsen

COPENHAGEN, May 22 (Reuters) – Shipping freight charges on the world’s busiest route, from Asia to Northern Europe, fell by the most important share quantity since 2008, reflecting wild volatility available in the market as vessel operators proceed to wrestle with overcapacity.

Rates for transporting containers from Asia to Northern Europe plunged 32.5 % to $444 per 20-foot container (TEU) within the week ended on Friday, a supply with entry to knowledge from the Shanghai Containerized Freight Index informed Reuters.

Shipping consultants Drewry reckon the Shanghai-Rotterdam and Shanghai-Genoa routes are the 2 most unstable amongst 11 that they monitor, with charges rising $1,000 or extra per TEU over only a few weeks after which falling again down once more.

“The drop in freight rates is witness to the brutal price competition and there is a need for far more cuts in capacity,” analyst Jacob Pedersen from Sydbank stated.

Shipping corporations akin to Maersk have stated they needed to extend fee dramatically on the spot market. Sometimes they reach making use of such excessive freight charges and the index rises because it did by 150 % in May.

Global chief Maersk Line stated it supposed to extend spot charges by $800 per TEU from June 1 and the world’s third-largest transport group, France’s CMA CGM, stated it needed to spice up charges by $1,000 from June.

But extra typically then not, these transport giants are compelled to just accept far decrease charges because of overcapacity — too many ships, not sufficient items.

“The volatility of global spot freight rates since the start of 2015 has continued to increase in comparison to 2014,” Drewry wrote in a be aware.

In the week to Friday, container freight charges dropped 25.1 % from Asia to ports within the Mediterranean, fell 7.0 % to ports on the U.S. West Coast and have been up 2.3 % to ports on the U.S. East Coast.

A.P. Moller-Maersk Chief Executive Nils Smedegaard Andersen stated final week Maersk Line would solely signal long-term freight contracts in the event that they have been worthwhile. Otherwise, Maersk Line most well-liked to be uncovered to the spot market. (Editing by Sabina Zawadzki)