News Content
Asia-Europe rates drop ahead of Golden Week with slack demand
SPOT rates in the Asia-Europe trade have been dragged down by weaker than anticipated demand, with the Ocean Alliance announcing that it will cancel sailings in the first week of October over China's Golden Week holiday.
CMA CGM, OOCL, Cosco and Evergreen will withdraw two loops on the Asia-North Europe route, and four services from Asia to the Mediterranean.
The latest reading of the Shanghai Shipping Exchange's SCFI shows that spot rates from Shanghai to Rotterdam declined by another US$35 to $734 per TEU. JOC.com's Market Data Hub, which tracks the weekly movements on major trades, shows that the rate has decreased by $300 since July 1, reported IHS Media.
SCFI spot rates from Shanghai to Mediterranean ports fell $21 to $709 per TEU, also a steady decline over the past eight weeks.
A steady growth in capacity has hindered carriers' efforts to increase rates on the route, although overall westbound rates are still higher than last year, and the buoyant backhaul rates ensured the profitability of Asia-Europe service providers, Alphaliner noted.
The analyst said average Asia-North Europe capacity in July and August was up by seven per cent compared to the same period last, with vessel utilisation remaining at 90 per cent, in spite of the addition of the new capacity.
A director with Drewry Supply Chain Advisors, Philip Damas, told the JOC's Container Trade Europe conference in Hamburg that the tightening of capacity at the trade route level has helped support a gradual rate recovery since the end of 2016, on account of shipping lines doing a better job at managing their capacity.
He said the improving capacity situation was one of the factors behind the reversal of contract rate deflation with analysis by Drewry indicating a 39 per cent year-over-year rise in contract rates on the Asia-Europe and trans-Pacific routes in the third quarter.
However, Alphaliner believes the large number of megaships that will be added to Asia-North Europe will trigger the cascading of a significant number of 8,000-14,000 TEU vessels to other trades. A total of 20 of these mid-size ships will be redeployed by the end of December and another 20 newbuildings are still to be delivered in 2017.
The analyst said cascading will continue in 2018, especially within the Ocean Alliance as its members will receive 25 units of 20,000-21,000 TEU over the course of next year. These will further push out smaller ships of 13,000-14,000 TEU from the Asia-North Europe trade.
CMA CGM, OOCL, Cosco and Evergreen will withdraw two loops on the Asia-North Europe route, and four services from Asia to the Mediterranean.
The latest reading of the Shanghai Shipping Exchange's SCFI shows that spot rates from Shanghai to Rotterdam declined by another US$35 to $734 per TEU. JOC.com's Market Data Hub, which tracks the weekly movements on major trades, shows that the rate has decreased by $300 since July 1, reported IHS Media.
SCFI spot rates from Shanghai to Mediterranean ports fell $21 to $709 per TEU, also a steady decline over the past eight weeks.
A steady growth in capacity has hindered carriers' efforts to increase rates on the route, although overall westbound rates are still higher than last year, and the buoyant backhaul rates ensured the profitability of Asia-Europe service providers, Alphaliner noted.
The analyst said average Asia-North Europe capacity in July and August was up by seven per cent compared to the same period last, with vessel utilisation remaining at 90 per cent, in spite of the addition of the new capacity.
A director with Drewry Supply Chain Advisors, Philip Damas, told the JOC's Container Trade Europe conference in Hamburg that the tightening of capacity at the trade route level has helped support a gradual rate recovery since the end of 2016, on account of shipping lines doing a better job at managing their capacity.
He said the improving capacity situation was one of the factors behind the reversal of contract rate deflation with analysis by Drewry indicating a 39 per cent year-over-year rise in contract rates on the Asia-Europe and trans-Pacific routes in the third quarter.
However, Alphaliner believes the large number of megaships that will be added to Asia-North Europe will trigger the cascading of a significant number of 8,000-14,000 TEU vessels to other trades. A total of 20 of these mid-size ships will be redeployed by the end of December and another 20 newbuildings are still to be delivered in 2017.
The analyst said cascading will continue in 2018, especially within the Ocean Alliance as its members will receive 25 units of 20,000-21,000 TEU over the course of next year. These will further push out smaller ships of 13,000-14,000 TEU from the Asia-North Europe trade.
Latest News
- For the first time, tianjin Port realized the whole process of dock operati...
- From January to August, piracy incidents in Asia increased by 38%!The situa...
- Quasi-conference TSA closes as role redundant in mega merger world
- Singapore says TPP, born again as CPTPP, is now headed for adoption
- Antwerp posts 5th record year with boxes up 4.3pc to 10 million TEU
- Savannah lifts record 4 million TEU in '17 as it deepens port