Freight rates out of Asia have plunged to their lowest levels since September 2009, while overcapacity in the market could prevent carrier attempts to implement an increase. Saturday, 19.Mar.2011, 23:43 (GMT+3)
Freight rates out of Asia have plunged to their lowest levels since September 2009, while overcapacity in the market could prevent carrier attempts to implement an increase.
According to the Shanghai Containerised Freight Index, rates on the four main global trade routes declined again last week, sinking to a 16-month low, and will continue to weaken until the peak season begins in July.
Rates from Shanghai to Europe fell US$68 to $1,076 per teu at the end of last week compared with the week before, while rates to the Mediterranean declined by $40 to $1,042 per teu.
Rates on services from Shanghai to the US west coast slumped $83 to $1,654 per feu and to the east coast by $94% to $2,862 per feu.
Analyst AXS Alphaliner said: âCurrent forward rates suggest that average freight rates will be 30% lower on the Far East-Europe trades and 15% lower on the transpacific this year than last.
âThe planned general rate increases on the Far East-Europe trade in April are expected to have only a moderate impact and carriers will have to wait until the peak season is in full swing, in July, before seeing any significant rate recovery.â
AXS Alphaliner has estimated that capacity growth on transpacific routes could reach 14%, compared with global fleet growth estimated at 8.7%.
It said:ââDespite the carriersâ predictions that the effective capacity growth in 2011 will be mitigated by the impact of delays in vessel deliveries, additional slow-steaming and container shortages, these factors are not expected to have a significant impact on the overall supply growth.
âA large part of the capacity due to be delivered this year has already been delayed from the last two years,â it warned.
One leading Asia Pacific logistics executive agrees that freight rates on key ocean trade lanes will remain soft.
Speaking exclusively to IFW in a major interview to be published in full tomorrow, Tony Hotine, Asia Pacific CEO of Damco, the logistics arm of the AP MÃ¸ller Group, said: "How long might we see softening on transpacific and Europe? We think they should start picking up in Q2, but we donât anticipate big spikes or that they will drop through the floor.â
However, he ruled out a return to the ârate volatilityâ of the past, which was âno good for any parties in international trade â it just adds to uncertaintyâ.