Asia-Europe rates jump ahead of tomorrow's GRI
Westbound rates on the Asia-Europe trade lanes saw big jumps last week ahead of a general rate increase (GRI) planned for tomorrow.
The most recent Shanghai Containerised Freight Index (SCFI), published weekly by the Shanghai Shipping Exchange, suggests that ex-China rates rose US0 per teu into Northern Europe and 0 into the Mediterranean.
That brings the Northern Europe and Mediterranean components of the SCFI to ,888 and ,977 respectively.
The news has surprised market analysts, who have previously expressed doubt that container lines could maintain strong price rises against a continuing backdrop of excess supply and weak demand.
Container Rate Derivatives Broker Ben Gibson, of Clarkson Securities, said: “Given the softer feeling of the market, little early traction was expected ahead of the 1 May GRI, but it seems that carriers have once again dug deep to keep rates rising, and so will likely be able to add more this week.”
More than 385,000teu of capacity was delivered to container lines in the first quarter of this year, most of which was composed of vessels with more than 8,000teu capacity. Total deliveries for the year are expected to reach 1.3 million teu.
Container line analyst Lars Jensen, of SeaIntel, said capacity injections on Asia-Europe now exceeded the capacity removed by Maersk Line and CMA CGM in February, amounting to 16,700teu a week.
He said: “Maersk Line and CMA CGM’s announced withdrawal of capacity provided the carriers with the momentum to successfully begin a series of much-needed rate increases.
“With the capacity reductions now disappearing, the carriers are facing a test: will they collectively have the resolve to maintain their focus on profitability rather than market share, or will some succumb to the need to increase vessel utilisation – and thus, potentially, launch a new price war?”
He added that recent capacity increases on the busy trade lane injections primarily came from the announcements of two new services by Evergreen, CSCL and Zim. But Maersk’s re-building of its S-class vessels – increasing their capacity by 1,400teu – was also contributing to oversupply.
The most recent Shanghai Containerised Freight Index (SCFI), published weekly by the Shanghai Shipping Exchange, suggests that ex-China rates rose US0 per teu into Northern Europe and 0 into the Mediterranean.
That brings the Northern Europe and Mediterranean components of the SCFI to ,888 and ,977 respectively.
The news has surprised market analysts, who have previously expressed doubt that container lines could maintain strong price rises against a continuing backdrop of excess supply and weak demand.
Container Rate Derivatives Broker Ben Gibson, of Clarkson Securities, said: “Given the softer feeling of the market, little early traction was expected ahead of the 1 May GRI, but it seems that carriers have once again dug deep to keep rates rising, and so will likely be able to add more this week.”
More than 385,000teu of capacity was delivered to container lines in the first quarter of this year, most of which was composed of vessels with more than 8,000teu capacity. Total deliveries for the year are expected to reach 1.3 million teu.
Container line analyst Lars Jensen, of SeaIntel, said capacity injections on Asia-Europe now exceeded the capacity removed by Maersk Line and CMA CGM in February, amounting to 16,700teu a week.
He said: “Maersk Line and CMA CGM’s announced withdrawal of capacity provided the carriers with the momentum to successfully begin a series of much-needed rate increases.
“With the capacity reductions now disappearing, the carriers are facing a test: will they collectively have the resolve to maintain their focus on profitability rather than market share, or will some succumb to the need to increase vessel utilisation – and thus, potentially, launch a new price war?”
He added that recent capacity increases on the busy trade lane injections primarily came from the announcements of two new services by Evergreen, CSCL and Zim. But Maersk’s re-building of its S-class vessels – increasing their capacity by 1,400teu – was also contributing to oversupply.
