Container freight rates held relatively steady last week in the lead-up to the summer peak season, according to two of the primary spot rate indices.
The Shanghai Shipping Exchange’s composite Shanghai Containerized Freight Index, which aggregates spot rates on 13 different outbound trades from Shanghai, up just under 1 percent on a sequential basis last week.
The SCFI’s Friday reading of 825.57 was down just 1.4 percent from 837.42 as of mid-July 2017 after trending much lower on a year-over-year basis the previous week.
The World Container Index, produced by London-based maritime shipping consultant Drewry, on the other hand, slipped 2 percent from the previous week to $1,438.84 per FEU and was down 5.2 percent from the same period last year.
On an individual trade lane basis, spot rates as measured by the SCFI from Shanghai to Europe were mostly unchanged last week, rising from $881 per TEU to $882 per TEU, while rates from Shanghai to the Mediterranean slid 1.8 percent, from $903 per TEU to $887 per TEU.
Pricing in the transpacific trades, on the other hand, showed strong growth, with rates from Shanghai to the U.S. West Coast jumping 8.4 percent, from $1,555 per FEU to $1,685 per FEU, and rates to the U.S. East Coast climbing 3.3 percent, from $2,623 per FEU to $2,710 per FEU.
But according to Drewry, WCI pricing from Shanghai to Rotterdam fell 1 percent sequentially to $1,661 per FEU last week and was down 11 percent compared with the same 2017 period. Rates to Genoa fell even farther, dropping 6 percent week-over-week and 10 percent year-over-year to $1,607 per FEU.
Eastbound transpacific rates from Shanghai to Los Angeles fell 4 percent to $1,472 per FEU, but remained 12 percent higher than at this time last year, while rates to New York were up 1 percent sequentially and 8 percent year-over-year at $2,571 per FEU.
Transatlantic pricing also remained in positive territory, rising 2 percent from the previous week and 13 percent from the same 2017 period to $1,942 per FEU.
In its weekly analysis, Drewry noted that the average composite WCI so far this year now stands at $1,377 per FEU, down 9.9 percent from the index’s five-year average of $1,539 per FEU.
Drewry said it expects a “marginal increase” in rates next week, as container carriers look to continue the positive profit momentum seen in 2017. The research firm in a recent report projected the industry as a whole “will only break even at best in 2018,” as stagnant rates, rising fuel prices and an inability to control costs are putting pressure on profit margins, factors that caused German carrier Hapag-Lloyd to cut its annual earnings outlook for 2018.
In addition, the major east-west carrier alliances have also been aggressively slashing services in an attempt to better align supply side capacity with demand.
On the transpacific trade, the 2M Alliance suspended its TP1/New Eagle string, while THE Alliance is scheduled to consolidate its PS5 and PS8 loops in the coming weeks.
Meanwhile, the OCEAN Alliance is slated to decrease its number of loops on the Asia-Middle East trade later this month by consolidating two of its services.