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Weak demand, falling rates leads to more cancelled Asia-Europe sailings

THE North Europe component of the Shanghai Containerised Freight Index (SCFI) dropped 6

Weak demand, falling rates leads to more cancelled Asia-Europe sailings

THE North Europe component of the Shanghai Containerised Freight Index (SCFI) dropped 6

09 September 2019 - 19:00

THE North Europe component of the Shanghai Containerised Freight Index (SCFI) dropped 6.2 per cent on September 6 to US$710 per TEU, while freight rates to west Mediterranean ports declined two per cent to $877 per TEU.

The drop in spot container freight rates on the transpacific and Asia-Europe trade lanes was attributed to a weak outlook for the markets after China's Golden Week holiday factory shutdown at the beginning of October, reported London's Loadstar.



Spot rates for north Europe are one-third lower than at the start of the year and continued to decline during the peak season, despite reports of ships leaving China with 95 per cent utilisation levels.



One forwarder said he had already received 'big discounts' on rates for October from shipping lines, saying: 'They are clearly very worried about what they are seeing in their booking forecasts.'



The latest edition of the north European container hub Global Port Tracker is pessimistic about import throughput for the remainder of this year and into the next.



'For north European imports we project the second half of 2019 to barely hold onto positive growth, and the first half of 2020 to be negative,' said the report's author Ben Hackett.



In a related development, the 2M alliance is suspending its AE2/Swan loop from the end of September, withdrawing 20,000 TEU of weekly capacity from the tradelane. If 'market demand recovers,' it will resume the service in mid-November.



2M alliance members Maersk and Mediterranean Shipping Company (MSC) also confirmed a blanked voyage of their AE7 and Condor service for week 41, due to the upcoming Golden Week, removing 17,000 TEU of capacity.



The Ocean and THE alliances have also voided sailings around Golden Week, and already withdrew 150,000 TEU of capacity during the peak season in a bid to lift rates.



Elsewhere, following the general rate increase-fuelled 26 per cent surge in spot rates from Asia to the US west coast at the start of September, the SCFI registered a three per cent decrease on September 6, to $1,566 per 40-foot container (FEU), and for the US east coast the index fell 2.2 per cent on the week, to $2,631 per FEU.



After deploying extra loaders during the peak season, transpacific carriers are now gearing up for weak demand following Golden Week and have announced nine blank sailings in October to the US west coast and six to the US east and Gulf coasts.


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