OCEAN freight rates are softening on four main ocean trades since the beginning of the year as anticipated growth in tonnage damages services with particular pressure on rates for Asia/Europe trade.
The Shanghai Containerised Freight Index (SCFI) said the rates on Shanghai to Europe services have dropped by US$39 to $1,342/TEU compared to week previous, and on Mediterranean services down by $3 to $1,209/TEU.
Transpacific rates from Shanghai to US west coast were down by $22 to $1,955/FEU and to east coast to $3,168/FEU. Although according to a major bank, tonnage will not increase to the same degree as the Asia/Europe service.
Carriers have struggled to implement increases of $250 to $350 at the beginning of year, said analyst Hackett Associates and the Bremen Institute of Shipping Economics and Logistics (ISL), reported London's International Freighting Weekly.
"Concern about the large amount of new capacity that will enter service during the course of 2011 is said to be weighing on prices," ISL spokesman added.
Difficulty in pushing prices up may be a result of the slowdown pre-Chinese New Year holiday and an attempt to keep volumes steady and preserve market share, say industry insiders.
A forecast of slowdown in growth of below eight per cent from Paris-based Alphaliner goes against Deutsche Bank predictions of 2011 tonnage increasing in the first nine months of the year by as much as 30 to 40 per cent.
The Frankfurt bank predicts rates to slow dramatically from last year's decrease of $980 to $880 in 2011 at $1,750/TEU and as low as $850 to $1,400/TEU in 2012.