World Container Index shows sharp increase in Asia/EU trade
March 12, 2012
Today’s Shanghai-to-Rotterdam container freight rate assessment from the World Container Index (WCI), a joint venture between Drewry and The Cleartrade Exchange, shows that container freight rates in the westbound Asia-Europe corridor increased by 114 percent this week.??
Carriers in the key Asia-Europe headhaul trade had previously announced General Rate Increases (GRIs) in the region of $700 to $800 per twenty-foot equivalent unit from March 1st.
The World Container Index’s Shanghai-Rotterdam container freight rate sub-index went from $1,276 per 40-ft container on 23 February to $2,732/40-ft in the same time frame –a rise of $1,456.
The London-based consultancy’s director, Philip Damas, provided some additional perspective:
“The World Container Index assessed by Drewry tracks freight rates very closely and promptly and answers the question which everybody has been asking: will the huge General Rate Increases of carriers be accepted by the market?”??
Damas noted, however, that shippers will wait and see whether these rate increases will stay or erode over time.
“Our view is that there will be a reduction of spot rates next week, but container shipping lines have withdrawn enough capacity from the Asia-Europe trade to support some net rate increases over a fair period of time,” he said.??
Damas also observed that some “opportunistic” shippers and forwarders brought forward the time of shipments of their cargoes to avoid the March 1st GRI.
The World Container Index is based on actual agreed freight assessments reported in the middle of every week by a number of industry players located in Asia, Europe and the US. Today’s World Container Index takes into account the rate changes due to take effect from the first of this month.
In other trade lane news, it was reported that Evergreen Line and Cosco, “K” Line, Yang Ming, Hanjin have agreed to initiate individual cooperative arrangements on Asia-Europe trades starting April 2012 as announced last December.
This cooperation between Evergreen Line and the four CKYH Lines is designed to offer customers best sailing frequency, transit time and service coverage to fulfill customers’ needs.
These bilateral arrangements will be implemented in eight weekly services for Asia - North Europe and four for Asia - Mediterranean including direct services for Asia - Adriatic regions calling Rijeka, Koper and Trieste.
Weekly services for Asia - North Europe, which offer the highest frequency in the market, will also provide very attractive transit times from Asia to major European ports including Rotterdam, Hamburg and Felixstowe (i.e. 26-27 days from Shanghai/Ningbo and 23-24 days from Yantian).
The majority of the fleet operated in these total 12 loops will be ranging from 8,000TEU to 13,000TEU.
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