Asia to Europe rates still on the slide

But vessels are sailing with more cargo

Container rates on the Asia to Europe trade continued to slide last week, but vessel utilisation levels on the trade have climbed back up to 90%.

The latest figures from the Shanghai Containerised Freight Index (SCFI) show that all-in spot rates on services from Shanghai to Europe slipped to US$978 per teu at the end of last week, down $14 on the previous week.

Meanwhile, rates from Shanghai to the Mediterranean fell $15 to $963 per teu over the same period.

Reports in the shipping press have suggested that prices are now less than the average bunker adjustment factor (BAF) , but one freight forwarder contact told IFW prices had not slipped to this level.

He said: “BAF is around $550-650 per teu and rates, as far as we are concerned, are just about holding.

“My China agent informs me vessels are 90-95% full again, the lowest rate any of my customers have been offered by other forwarders, via a carrier with an acceptable transit time, is US$900 per teu. ”

He added that some carriers were offering services as low as $1,400 for a 40ft container – the amount quoted in one press report – but said 95% of importers wouldn’t accept their service as the transit time was more than 40 days.

The current BAF being charged by Maersk Line stands at $690 per teu for a dry container, although this is set to increase to $760 per teu in May.

He warned that the new Evergreen/China Shipping/Zim Asia-Europe service, due to be launched at the end of April, could also adversely affect rate levels.

Container derivatives broker GFI agreed that rates would not increase over the next few weeks.

It said: “With the market haemorrhaging on the Far East–Europe route, it is hard to see any rate upside in the near term.

“Despite carriers and some freight forwarders reporting utilisation levels of above 90%, this is hardly justified by physical spot rates.

“If the momentum continues to fall at the same speed, then rates could reach $906 per teu by the end of next week.”

Meanwhile, rates on Asia to North America continued to pick after the increase recorded two weeks ago. Prices to the US West Coast from Shanghai jumped $26 to $1,657 per feu, while prices to the East Coast were up $76 to $2,981 per feu.(IFW)

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