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Decline in Asia to Europe rates slows

Rate of decrease alters as forwarders find there is room for manoeuvre as price hikes kick in...

Decline in Asia to Europe rates slows
04 January 2011 - 18:40

The decline of container rates on the Asia to Europe trade slowed last week, as prices dropped just US$4 per teu. 

According to the Shanghai Shipping Exchange (SSE), rates on services from Shanghai to Northern Europe dropped from $1,337 per teu for the week ending 10 December, to $1,333 per teu for the week ending 17 December. 

However, this price drop is a lot less than the previous week when rates dropped by $42 per teu.
The week before that, rates from Shanghai to Europe dropped by $95 per teu. 

The weekly index for 15 trades from Shanghai also declined at the end of last week, dropping from 1,101.42 to 1,086.38. 

The index has now been in decline since the beginning of July. But the slowdown in the speed of decline comes as carriers prepare to increase Asia-Europe rates next week. 

Forwarder sources told IFW that carriers were being strict in their intention to apply the rate increases, although there is, apparently, some room for manoeuvre. 

One contact said he believed carriers could settle for an increase of around $100-150 per teu, instead of the planned increase of $200-300 per teu. 

But there are also rumours that some forwarders are offering rates that exclude the increases – which one contact said raised the question as to whether the forwarders were taking a hit in order to win new customers rather than because they had secured lower rates from the carriers. 

According to Freight Investor Services, a container broker, container swaps were, last week, trading at a mid-range price of $1,438 on the Asia to Europe trade for January. 

Mid-range trades for the first quarter were taking place at $1,448 per teu, $1,420 per teu for the second quarter, $1,583 per teu for Q3 and $1,523 per teu for the fourth quarter. 

Meanwhile, rates from Shanghai to the Mediterranean fell $12 at the end of last week to $1,236 per teu, while rates on services to the US west coast were down $24 to $1,832 per feu, and down $44 to $3,028 per feu for services to the east coast.

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