For the first time since the beginning of this year it is now more expensive to ship a 40ft container from Asia to North Europe than to the North American west coast, as container spot freight rates on the two largest east-west trades spent a third week diverging.
Spot rate indices all recorded another week of double-digit price declines on shipments from Asia to the US west and east coasts, with the Shanghai-Los Angeles leg of Drewry’s World Container Index (WCI) dropping 15% week-on-week to end at $3,180 per 40ft.
Meanwhile, Xeneta’s XSI and the Freightos FBX index showed similar spot rate levels, although differing in the steepness of the falls, with the XSI’s Far East-US west coast route dropping 16% week-on-week to $2,677 per 40ft and the FBX down 39% to $3,388 per 40ft.
The lowest reading for the route was on the Shanghai Containerised Freight Index (SCFI), which recorded a 19% decline to end the week at $2,089 per 40ft
The WCI’s Shanghai-New York leg lost 11% on the previous week to $5,070 per 40ft, while the same route was down 15% on the FBX to $6,116 and by 13% on SCFI to 4,124 per 40ft.
This was in stark contrast to the Asia-North Europe trade, which continued to surprise forwarders with the WCI recording an 8% gain on the previous week to end at $3,468 per 40ft – the last time the Shanghai-Rotterdam leg was higher than Shanghai-Los Angeles on the index was 5 December last year.
The XSI’s Asia-Europe route increased 17% to end at $3,354 per 40ft, marking the fourth consecutive week of spot rate rises on the trade.
It also indicated that new carrier FAK rates of $3,900-$4,100 per 40ft implemented on 1 July were partially successful.
According to Jérôme de Ricqlès, shipping expert at French supply chain data company Upply, Asia-Europe carriers have also benefitted from tight capacity management.
“Asia-Europe ticked up a bit in the past weeks. Why? First, because there were a lot of blank sailings,” he said earlier this week during a freight rate webinar.
“Secondly, because there was some capacity that was deployed to the transpacific to try to secure as much front-loaded volume as they could, the ratio between offer and demand on Asia-Europe was quite favourable for the shipping lines.
“We are not talking about crazy numbers – we are more talking about stability. But the market maintains a consensus on Asia-Europe, which is very different to what happened on the transpacific, because we see transpacific rates are now decreasing quite vastly and front loadings were not as big between Asia and the US as carriers expected,” he explained.
And if the Asia-Mediterranean trade is anything to go by, rates to Northern Europe could be set to fall next week, with WCI’s Shanghai-Genoa leg losing 9% week-on-week to end at $3,751 per 40ft, while the FBX saw the same route lose 5% to finish at $4,223 per 40ft, and could indicate that a similar attempt to hike FAK rates on 1 July was utterly unsuccessful.
The FBX also recorded a 4% decline on its China-North Europe route, to $2,969 per 40ft.
Meanwhile, there were also rate increases on the transatlantic, which has been flat since mid-April. The WCI’s Rotterdam-New York leg posted a 7% week-on-week gain to $2,119 per 40ft.
1 July also saw CMA CGM implement an $800 per 40ft peak season surcharge on westbound transatlantic reefer shipments from Northern Europe to US east coast, Gulf coast and Mexican ports.
