Maersk has announced several general rate increases:
• Rates for Far East Asia to Middle East and Indian Subcontinent will increase $100 per TEU, FEU and 45-foot container, effective July 1.
• Rates for Far East Asia to East Coast South America will increase $750 per TEU; $1,500 per FEU; $1,500 per 40-foot, high-cube container; and $750 for non-operating reefers, effective July 7.
• Rates for Japan to North Europe will increase $100 per TEU; $200 per FEU; and 200 per 45-foot container for dry containers, with rates going up by $100, $200 and $200 for respective reefer containers, effective July 1.
• Rates for Japan to Mediterranean will increase $250 per TEU; $500 per FEU; and $500 per 45-foot dry container, with rates going up by $250, $500 and $500 for respective reefer containers, effective July 1.
• Rates for Japan to Syria will increase $239 per TEU; $350 per FEU; and $350 per 45-foot dry container, with rates going up by $250, $477 and $477 for respective reefer containers, effective July 1.
Cosco will increase rates for Far East to South America East Coast by $750 per TEU, and $1,500 per FEU and 45-foot container, effective July 7.
Richard Ward and Ricky Forman of Freight Investor (UK) provide weekly analysis and insight into the Shanghai Container Freight Index.
This week saw the SCFI fall on NWE by $14 to $1,106 per TEU. Early in the week, market feedback had suggested that capacity was relatively tight, although space was still achievable. Therefore, expectations for this week were for, perhaps, a slight increase to reflect the planned GRI for July; however, with no jump materializing, perhaps the increase will be less strong than carriers would have hoped.
The latest reports suggest that some carriers have pushed back the increase until July 8-15, with rates of between $2,600-2,800 per FEU being reported. The delay from the July 1 could be a reflection of those carriers who lack the strong utilization seen by other lines.
Despite the uncertainty surrounding July year-to-date, rates to NWE have been, on average, 26-percent higher than they were during the same period last year, which will offer carriers some relief. However, not being able to push through an increase planned for July 1 in full, supposedly peak, season does not reflect well for carriers.
Contracted rates for the third quarter are still being agreed at below $1,000 per TEU, which is most likely to be in loss-making territory for most carriers. As the third quarter develops, these lower contracted rates will place downward pressure on any increases that carriers can achieve in the spot market during the three-month period. Savvy carriers could instead use FFA's to secure their net income at around $1,300 per TEU — well above where traditional contracts are being agreed. Alternatively, carriers can continue to offer deals at levels below break-even.
On the USWC, rates have increased by $49 to $1,769 per FEU due to the planned GRI. The market will be waiting to see if a further increase is reported next week or whether carriers have failed to push up rates by their intended $400 per FEU. This week, the FFA market has been trading Q1 2015 USWC at levels of around $2,100 per FEU. Those carriers concerned that rates could be lower than this during the New Year are able to secure their spot income today at the aforementioned levels.