Asia-Europe Container Spot Rates Find a Floor—For Now

By Gavin van Marle (The Loadstar) –

This week’s FAK rate hikes introduced by carriers on the Asia-Europe trades managed to arrest 13 weeks of successive spot freight rate declines.

All the major spot rate indices this week showed a slight increase on the trades.

The Shanghai-Rotterdam leg on Drewry’s World Container Index (WCI) increased 2%, week on week to end at $2,636 per 40ft, while the Shanghai-Genoa leg was unchanged, at $3,745 per 40ft.

Xeneta’s XSI Far East-North Europe route showed a marginal week-on-week increase of just under 1%, to $2,733 per 40ft, while the Freightos Baltic Index’s Asia-North Europe increased 1%, to $2,973 per 40ft and the Asia-Mediterranean was up 1%, to $4,177 per 40ft.

Although these levels are considerably below the FAK [freight all kinds] rate of around $4,100 per 40ft to North Europe carriers were seeking with the 1 March increases, lines will find some comfort in the fact that three months of dropping prices have found some sort of floor.

How long that remains will depend on their capacity management over the next couple of months, which, as several speakers at this week’s S&P Global TPM25 conference in Long Beach noted, is particularly difficult while they are simultaneously rolling out new networks.

“Carriers are focused on getting the new networks up and running, which means blank sailings are not as effective as normal, and while this is under way they are also trying to hang on to market share,” Vespucci Maritime’s Lars Jensen told delegates.

However, new analysis of forthcoming capacity changes indicates carriers are on the verge of beginning to reduce capacity from Asia into Northern Europe, while increasing it to the better-paying Mediterranean destinations.

Using MSC’s upcoming proforma schedules as a proxy, liner database eeSea noted: “In Northern Europe, MSC’s expected (aka proforma) monthly