FREIGHT rates between Shanghai and North Europe have continued to fall 5.3 per cent to US$1,019 per TEU as of March 18 from $1,076 the previous week, and rates from Shanghai to Mediterranean ports decreased 3.9 per cent to $1,001 from $1,042, according to the China Containerised Freight Index (CCFI) report.

Meanwhile the spot index from Shanghai to Europe dropped to $992 per TEU at the week of March 25, down $27 per TEU from last week. Since the Shanghai-Europe spot index increased $59 per TEU on December 31, it has fallen 29 per cent.

This downward trend indicates that the Asia-Europe rates have shrunk to the lowest point since March 2009, reported Newark's Journal of Commerce. Forwarders have quoted rates of ocean carriers as low as $800 per TEU for Shanghai-UK services, reported London's International Freighting Weekly.

Container derivatives trader GFI said: "There is still no news of any capacity adjustments by carriers on the Asia-Europe trade lane, which is making it extremely unlikely that the proposed general rate increases will be implemented [on 1 April].

"Speaking to a number of industry participants, the general view is that, despite an increase in bunker adjustment factors (BAFs) in April, the decrease in base freight rates will cancel out any upside caused by BAFs."

Another derivatives broker, FIS, added: "Rates on Europe routes remain in freefall, with most services ex-China reported to be loading to only 85-98 per cent utilisation.

"Extra pressure has been placed on these services this week, with a dramatic reduction in Japanese export cargo creating even greater space availability on vessels," he said.

FIS noted that both shippers and forwarders tend to ignore the proposed rate increases that come into effect in April, and "carriers will need to remain disciplined if they wish to secure any kind of sustained increase."