Shanghai-North Europe shipping rates hit record low

Global – The Shanghai Containerized Freight Index (SCFI) covering Shanghai-North Europe rates plummeted to an all-time low of US$ 466 per TEU on Monday April 13, analysts at The Loadstar have reported.

The SCFI entered new territory after a week that saw rates to North Europe ‘nosedive’ a further US$ 45. ‘They are now 60% below the same week of 2014, and a massive US$ 790 less per TEU than spot rates at the beginning of January this year,’ it is stated. Reports from industry players indicate that load factors between Asia and North Europe fell to as low as 70% in the last two weeks of March, forcing carriers to postpone an ambitious US$ 800-1000 per TEU general rate increase (GRI) scheduled for April 1.

Meanwhile, weak demand and additional capacity coming on stream mean container lines have been unable to stem the tide of week-on-week declines in freight rates.  ‘As a result of the most recent collapse, carriers are now taking remedial action with ad hoc sailing cancellations during the month of May,’ explains Richard Ward, container derivatives broker at Freight Investor Services. ‘No doubt these will be combined with yet another GRI attempt for maximum effect at the expense of disruption to shippers.’