Asia-Europe and Transpac rates see more weekly gains

The summer peak in container freight rates on the major East-West trades is showing few signs of petering out. Yet more gains have been recorded by leading indexes this week ahead of anticipated liner General Rates Increases (GRI) at the start of next month.

The Shanghai Containerized Freight Index (SCFI) continued to make steady gains this week with prices on the Europe sub-index up $21 per TEU to $937 per TEU and the Mediterranean sub-index gaining $30 per TEU to $996 per TEU.

Flexport reports that space remains tight on Asia-Europe liner services and is advising customers to make bookings three weeks prior to the cargo-ready date.

As reported in Lloyd’s Loading List , rollovers are causing trans-Pacific shippers sleepless nights and the lack of slot availability on services out of Asia is continuing to put upward pressure on freight rates. The SCFI’s US west coast sub-index is up $34 per FEU this week to $3,440 per FEU, while the US east coast index gained $41 to reach $3,953 per FEU.

The World Container Index (WCI) also recorded substantial gains this week with the composite index increasing 4.2% and now up 49.7% year-on-year, according to Drewry. The Shanghai-Rotterdam, Shanghai-Los Angeles and Shanghai-New York sub-indexes saw increases of 4-11% this week and are now 14%, 143% and 55%, respectively, higher than a year earlier.

Shipping analyst MSI said it was not clear how durable the current main lane volume rebound would prove, noting “considerable risks around the withdrawal of employment and income support later in the year”.

However, MSI added that “overall it seems demand for containerised goods has weathered COVID-19 in a stronger manner than initially anticipated” and now expects the global primary container trade to shrink by only around -5% year-on-year in 2020.

MSI said the exact cause of surges in US west coast spot rates would not be clear until more data becomes available. “There is potentially a role being played by an earlier backlog of rolled cargoes, and possibly carriers are dealing with newer, lower volume and less experienced e-commerce players in the spot freight market, giving them greater market power,” it reported. “But overall it will be surprising if data do not reveal a notable volume increase in mid-July onward.”

MSI added: “More broadly, freight rates across different trades have shown increases or stability after mixed performance over July. Asia-Europe rates have generally trended upwards, while trans-Atlantic rates remain steady. On non-main lane routes Far East-Latin America rates have rebounded from a low reached in July, while Far East-Middle East rates have also trended upward.