Container freight rates from Asia continued to rise this week, reaching highs well above long-term sustainable levels.
SCFI up 162 % from the same week last year
The cumulative Shanghai Containerized Freight Index (SCFI) hit a new record high of 2,311.71 on Dec. 11, up 162% from the same week last year.
After initially lagging behind massive rate increases on the transpacific, spot rates to Northern Europe are now leading the rate race in terms of percentage increase and are 230% higher than a year ago.
The Northern Europe component of the SCFI rose 24% this week to $2,948/teu, while spot rates to Mediterranean ports increased 29% to top $3,000 at $3,073/teu.
Freight rates paid by shippers to Europe are significantly higher
However, reports this week suggest that the actual rates paid by shippers to secure containers and the last remaining slots to Europe are significantly higher.
Lars Jensen of SeaIntelligence said anecdotal evidence suggests that the exact rates paid by shippers on the Asia-North Europe tradelane could be as high as $5,000 per teu.
“In this context, it should be noted that the market has reached a point where SCFI is significantly underestimating the actual rates paid in some cases, due to additional charges related to equipment and space availability,” Mr. Jensen said.
One British carrier confirmed to The Loadstar this week that rates on the Asia-Northern Europe route had reached the $10,000 mark per 40-foot high cube.
“It’s gotten crazy,” he said.
CMA CGM: Asia-Northern Europe route of a “booking freeze” for weeks
Moreover, current rates may be irrelevant if other carriers follow CMA CGM’s lead. The French carrier has notified its customers on the Asia-Northern Europe route of a “booking freeze” for weeks 49, 50 and 51 “due to the strong demand for containers from Asia and the backlog in recent weeks.”
And another carrier notified its Asia-North Europe customers this week that it plans to charge a $1,000 per teu fee if a shipment is canceled within two weeks of the loading date.
Increase in spot rates to the U.S. East Coast
After several weeks of stable (but high) rates on the transpacific, SCFI recorded a $104 increase in spot rates to the U.S. East Coast to $4,804 per 40 feet, a 91% increase over the same week last year, while rates to the West Coast were unchanged this week at $3,984 per 40 feet, still a huge 188% increase over SCFI’s figure from a year ago.
And the rush to the U.S. West Coast doesn’t appear to be slowing down, with the Port of Los Angeles’ Signal Volume Forecaster expecting 48% and 44% more containers on ships over the next two weeks.
NVOCCs are in a “mad scramble” to secure space, with BCOs increasingly using the services of consolidators to get rid of their goods at any cost.
In other secondary trades, SCFI saw spot rate increases across the board. For example, rates from Asia to South Africa rose 15% this week to $2,289 per teu – up 130% from 12 months ago.
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