Carriers have decided to delay the increases in freight rates of US$250-$300 on the Asia-Europe trade lanes to March after the unexpected decline of spot rates, reports London's International Freighting Weekly.
Freight rates between Shanghai and north Europe dropped to $1,381 per TEU on January 7 from $1,401 the previous week, according to the Shanghai Containerised Freight Index (SCFI).
And rates from Shanghai to the Mediterranean fell $17 from $1,250 as of December 31 to $1,233 as of January 7.
The carriers were trying to secure future cargo, said Jamie Cramer, director of British freight forwarder IFE Global Logistics.
"I think they are worried about business levels after the Chinese New Year [holiday in first week of February], and are trying to grab business for the slack period," he said.
This has surprised the industry, noted IFW, because the current utilisation rate still ranges from 90 per cent to 95 per cent.
Industry observers had expected to see the Shanghai index increase on the back of bunker price rises, and proposed general rate increases from carriers and reasonable utilisation levels.
"Increases of $20-30 per TEU were touted in the market. However, rates fell by $20 instead," said container broker Freight Investor Services (FIS).
"Questions now abound over when any of the proposed general rate increase will be secured, with several reports of carriers already offering rates through to the end of the first quarter," said the FIS report.
"With vessels reported to be loading to 90-95 per cent full, utilisation is good, but not enough to drive the rate increases that were planned. Or is it an eye on market share that is holding the carriers back?" FIS speculated.
"Many suggest that with supply and demand in a delicate balance, any aggressive moves in the market could send rates spiralling, with carriers' balance sheets heading the same way - as they did in 2008/2009," said the report.
"However, rates may be able to sink a great deal further with carriers still remaining profitable, as network and other costs are dramatically lower than they were two years ago," it said. |
