container-freight-rate-falls-down


Hopes for a recovery in freight levels continued to wane as mainline carriers failed to implement a general rate increase (GRI) on June 1, marking their third straight unsuccessful attempt following two flops this month.

The Shanghai Container Freight Index (SCFI) has lost 6% over the past month, wiping out April's gains.

Mainline shipping lines have continued to add capacity to the Asia-Europe service as they vie for market share, thwarting any chance of stopping the slide. Meanwhile, capacity on the transpacific service has diminished as new entrants to the service have withdrawn or reduced their deployments.

Linerlytica's latest report, released May 22, notes that the 12 largest ocean carriers have added 5% more capacity since January 2022, when freight rates peaked.

On May 19, SCFI averaged US$869/TEU for the Asia-Europe service; US$1,329/FEU for the Asia-US West Coast service and US$2,365/FEU for the Asia-US East Coast service, down from US$883/TEU, US$1,633/FEU and US$2,510/FEU in April.

Some shipping lines want to push rates above $1,800/FEU for the Asia-US West Coast service, up from the current level of $1,400/FEU, but are having difficulty filling vessels due to oversupply.

ZIM Line increased capacity the most, at 34.5%, a move that resulted in a sharp drop in its Q1 2023 profit, with a net loss of $58 million due to its Asia-West Coast and Asia-Pacific services. Asia-Australia fell into a loss.

Linerlytica estimates current capacity at 5.56 million TEU for the Asia-Europe (including Mediterranean) service and 4.98 million TEU for the trans-Pacific service. This compares with 5.39 million TEU and 5.67 million TEU a year ago.

The capacity of the Asia-Europe service continues to grow as more new-build vessels enter the service, with the 2M alliance appointing nine vessels from June. Despite the slowdown, capacity will still increase due to the elimination of blanked sailings.

 

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Source: Phaata.com (According to ContainerNews)

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