No signs of a rates war yet despite sea freight volumes declining
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No signs of a rates war yet despite sea freight volumes declining

CONTAINER shipping lines engaged in the Asia-Europe trade will collectively cancel 14 sailings at the beginning of October, in an effort to compensate for the expected drop in demand after the Chinese Golden Week holiday and the start of the traditional slack season.

22 September 2017 - 22:00 - Update: 26 September 2017 - 22:10

All ocean carrier members of the three vessel-sharing alliances have announced capacity reductions via blanked sailing programmes.

Carriers are anxious to underpin the contract rate gains of the past year that have translated into a turnaround in their fortunes, and are well aware of the consequences of a fresh rate war, reported London's Loadstar.

Meanwhile, the European components of the Shanghai Containerised Freight Index (SCFI) recently recorded another decline in spot rates, which dropped 5.3 per cent for North Europe, to US$769 per TEU, and by 3.7 per cent for Mediterranean ports to $730 per TEU.

In contrast to Alphaliner, which suggested that the rate truce between carriers was "crumbling", Drewry did not believe that the spot rate slippage heralded a new rate war on the trade.

Director of research, containers, Neil Dekker, at Drewry, told The Loadstar: "There is no rate war at the moment, but there has been a definite softening of rates on a number of headhaul routes in recent weeks."

Mr Dekker referred to the factory closures in Beijing, Shanghai and Guangdong since the beginning of August as the key reason for the demand blip.

He said: "Carriers report weakening volumes and lower load factors at a time that should usually coincide with the peak season surge on east-west routes."

This has hobbled carriers' plans to increase freight all kinds (FAK) rates to Europe and to introduce GRIs for the transpacific.

However, spot rates between Asia and the US rebounded a little recently. Elsewhere, the SCFI recorded significant reductions in spot rates for West Africa and South America.

Chief executive of ocean freight benchmarking and data analyst Xeneta, Patrik Berglund, told The Loadstar he was seeing the "basis for a much healthier market."

Mr Berglund added: "There are no low rates anymore... and unless they (the carriers) do something very stupid, the outlook is encouraging for contract rate renewals."

 

 

 

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