News / Silver lining for carriers may be in sight as clouds over Asia-N Europe rates begin to clear

first_imgTriple ULCS Call at APM terminals Pier 400 Los Angeles February 2015 Container shipping rates on the main east-west trades rose this week, reversing two weeks of decline, with analysts predicting a continuing upward trend.Spot rates recorded on the Shanghai Containerized Freight Index (SCFI) this week rose 8% on the Asia-North Europe leg, to $755 per teu. This followed a week off for the SCFI as China went into celebration mode for its Golden Week.The index had recorded a dip of 8.5% immediately before Golden Week, while the week before that saw a decline of 20.9%.While Asia-North Europe pricing appears to be on the rebound, trade between Asia and the Mediterranean continued to decline, with rates down 3% to $565 per teu. Patrik Berglund, chief executive of Xeneta, which provides a freight rate benchmarking tool, said longer-term contract rates for 40ft containers on Asia-North Europe had climbed 47% over the past six months.“In April, these rates were $361, they now stand at $965, representing a 168% increase,” he said. “If short-term rates [which showed growth between the second and third quarters] continue to rise, it will make for a fantastic negotiating position.”As if on cue, yesterday CMA CGM announced its freight all kinds (FAK) rates on the Asia-Mediterranean and Black Sea routes would be $1,150 per 20ft and $2,200 per 40ft from tomorrow (15 October).And earlier this week, Hapag-Lloyd announced a rate restoration programme beginning on 1 November that would see its FAK rates increased to $1,250 per 20ft and $2,400 per 40ft for North Europe and the West Mediterranean, and $1,550 per 20ft and $3,000 per 40ft for East Mediterranean and Black Sea destinations.These come on the back of OOCL’s $800 per teu rate restoration effort which begins on 17 October.Transpacific carriers, which held on to gains made by the Hanjin fallout, also recorded strong rate increases this week. Rates between Asia and US west coast ports were up 13% to $1,914 per 40ft, while US east coast ports reported growth of 6% at $2,563 per 40ft.Mr Berglund said west coast short-term rates bottomed out in April at $782 per 40ft.They started the third quarter at $1,243 per 40ft and closed on $1,826.“These price changes reflect an upward trend, which will benefit long-term contracts,” he added.Meanwhile, the Seoul Central District Court, responsible for overseeing Hanjin’s receivership process, has approved the auction of the carrier’s major assets, including its Asia-US route network.Zim Integrated Shipping Services is set to launch an additional service on its Asia-Pacific north-west route on 25 October ,with the following rotation: Xingang-Qingdao-Shanghai-Prince Rupert-Xingang.center_img By Alexander Whiteman 14/10/2016last_img read more