European freight rates have fallen for the fourth week in a row as shipping companies cancel or reduce their plans to increase rates. However, for those shipping between Asia and the US, the situation is looking better, with rate increases noted on both coasts.
This week, the Drewry’s World Container Index (WCI) showed that rates on the Shanghai-Rotterdam route remained steady at $4,653 per 40-foot container. In contrast, the Shanghai-Genoa route saw a 2% drop from the previous week, ending at $5,506 per 40-foot container.
Analysts from Linerlytica reported, “Asian carriers for the Europe route couldn't maintain their rates into August, and prices continue to decline. Average spot rates in early August vary widely, ranging from $4,000 to $5,000 per 40-foot container.”
They added, “Those hoping for a rate increase will have to wait until mid-August, when CMA CGM and MSC plan to introduce new FAK rates of $6,200 and $7,800 per 40-foot container, respectively, starting August 15.”
The new FAK rate from CMA CGM reflects a $900 decrease compared to the rate announced in mid-July. Meanwhile, Maersk has confirmed that it will not be implementing its peak season surcharge for the Far East-Mediterranean route set for August 14.
Lars Jensen, CEO of Vespucci Maritime, noted that Maersk’s move indicates the market may have already passed the peak season. Sources shared with The Loadstar mentioned that maintaining current rates would be seen as a positive outcome for carriers.
Unfortunately for carriers, today's Shanghai Containerised Freight Index (SCFI), which predicts rates for the upcoming week and can indicate the behavior of next week’s WCI, might pose some bad news.
The SCFI indicates a drop in rates for the Shanghai-North Europe and Shanghai-Mediterranean routes, forecasting decreases of 2.1% (to $4,934 per 40-foot container) and 3.4% (to $5,730 per 40-foot container), respectively, compared to the previous week. This contrasts with WCI's projections for the coming week.