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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 earthquake and subsequent tsunami that hit Japan this morning is first and foremost terrible for the people affected by this natural disaster
As the Chinese Lunar New Year draws to an end, the container lines have already prepared themselves for a strong rebound. In fact they must have been
The last two years have been extreme for the container shipping industry. When the crisis started in 2008, the industry first saw volumes contract sharply and subsequently rates dropped like a stone as liner companies were fiercely fighting for market shares at full speed – so to speak.
Today's weakness in box shipping might lead to 200 vessels being taken out of service until volumes rise, BIMCO analyst Peter Sand told Fairplay today.
Forecast: BIMCO expects the fourth quarter to be a difficult one, with volumes going down from recent highs. This may also mean idling vessels becomes more normal again as they are removed from stings or simply temporarily abundant as volumes tighten. During the first half of 2010 the container trade has made a remarkable comeback. Rates have doubled on many routes and volumes have returned from the abyss to the benefit of many owners who have switched from red ink to black as a result of this.
Demand: We see that the freight rate index levels from China show that rates to Europe have been very stable around 1,800 (index value) since April with a slight negative trend over the last three weeks. Spot prices from Shanghai have been equally firm at around USD 1,900 per TEU. Meanwhile, rates for containers heading for US West Coast continue to soar. Since early April the China Containerized Freight Index for the US West Coast has gone up by 20%.
US President Obama has issued an Executive Order with the heading “Blocking Property of Certain Persons Contributing to the Conflict in Somalia”, which could have an impact on the possibility for paying ransom under some circumstances. The situation is not clear and perhaps some ship owners will consider how to address this situation before transiting the Gulf of Aden and the Somali Basin. On that background, we hereby include an updated version of our calculations regarding the cost part of the decision to go round the Cape of the Good Hope.
The challenge of redeploying laid-up vessels in a market flooded by newbuildings creates a market balanced on a knife edge
