Container spot rates now below USD 1,000 per TEU for Shanghai - Europe

Container spot rates now below USD 1,000 per TEU for Shanghai - Europe

Overview

Spot rates for shipping of containers out of Shanghai bound for Europe have now slipped below the USD 1,000 per TEU–mark for the first time since March 2009. Following yet another weekly drop in freight rates on this main trading lane, boxes are now being shipped off at USD 992 per TEU, USD 27 per TEU lower than last week.

Spot rates for shipping of containers out of Shanghai bound for Europe have now slipped below the USD 1,000 per TEU–mark for the first time since March 2009. Following yet another weekly drop in freight rates on this main trading lane, boxes are now being shipped off at USD 992 per TEU, USD 27 per TEU lower than last week.

The spot rate has been sliding since mid-2010, paused only by a short breather around the turn of the year, where efforts made by shipping lines to imposed General Rates Increases (GRI) proved to be short-lived and non-sticky. Since the Shanghai-Europe spot rate increased by USD 59 per TEU on 31 December 2010 the rate has dropped by 29% on the continued downward trend.
Shipping analyst at BIMCO, Peter Sand says: “Low volumes have triggered fierce competition on main trading lanes including Shanghai-Europe. Rate cuts are ongoing as liner companies struggle to fill their vessels.”


Source: BIMCO, Shanghai Shipping Exchange

Following the ending of the Chinese Lunar New Year in February, a rebound in export volumes from China was anticipated but has not materialized. Thus vessel capacity already in place to handle the growing volumes has developed into a toxic cocktail resulting in ongoing decreasing rates. As European and US consumers are still focusing more on savings and debt-reductions rather than on consuming more containerized goods from China, demand has hesitated to pick up significantly.

“Next to five weeks of serious rate cuts, the decrease this week is much smaller, giving reason to believe that sliding rates could be terminated over the coming weeks. But we might go all the way into the peak-season in Q3 before sustainable spot rate levels on Shanghai-Europe is back “, add Peter Sand.

BIMCO - Shipping Analyst: Peter Sand PS@BIMCO.ORG

in Copenhagen, DK

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