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Concern over shipping rate volatility

Global – As container shipping lines prepare to introduce a new round of peak season surcharges on the trunk Asia-Europe trade route, overcapacity is causing forwarders to fear that rates are set to suffer another period of profound volatility. ‘€˜The problem is that the ships aren’€™t full,’€™ says Matthias Hansen of Geodis Wilson in Hamburg. ‘€˜Some are sailing only 60% full.’€™

Figures from the Shanghai Containerised Freight Index (SCFI) show that the Shanghai-North Europe spot rate benchmark has fallen 4.5% over the last week to US$ 1667 per TEU. Although there are concerns that the decline is the beginning of a slide, current spot rates are profitable for carriers (provided bunkers don’€™t swing violently upwards) and workable for forwarders as long as they stay relatively constant.

‘€˜US$ 2500-3000 per TEU is a level that works for us, as long as it remains stable,’€™ notes Volker Spevacek, Geodis Wilson’€™s Director of Ocean Freight. ‘€˜The key thing is that we don’€™t want to bet on rates; we don’€™t want all these highs and lows.’€™

Over the last week, it has emerged that Maersk and the CKYH alliance skipped some sailings in an effort to trim capacity after various carriers announced peak season surcharges ranging between US$ 250 and US$ 400, effective August 1.

The latest research from shipping consultancy Alphaliner shows that the global idle fleet – the number of TEU slots currently laid up – came to 446 200 TEU at the beginning of this month, representing 211 vessels of which 167 are in the 500-3000 TEU size range. Alphaliner comments: ‘€˜The idle fleet is expected to rise further as carriers refrain from introducing new capacity into an already over-supplied market.’€™

For more information, visit: www.geodiswilson.com

To read further information, check the original The Loadstar article

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