The Shanghai Container Freight Index (SCFI) for exports from China jumped sharply last week.
The overall SCFI rose 13.1 percent to 1,231.31, while the index for cargo moving to Europe was up a whopping 42.4 percent to 1,423 and to the Mediterranean, 42.3 percent to 1,366.
weekly newsletter said the increase “reflected an increase in spot freight rates of $424/TEU" last Friday, "following recent announcements that carriers had intended to increase their rates by an average of $675/TEU. Presuming there’s no residual increase in the index next Friday then carriers will have been successful in implementing around 60% of the proposed increase.”
Hapag-Lloyd said Monday it's planning two general rate increases of $500, each effective April 15 and May 13, from the Far East (excluding Japan) to North Europe and the Med. Separately Hapag-Lloyd is planning a $225 increase on April 1 for freight moving from India and Pakistan to North Europe and the Med.
On trades to the U.S. West Coast the index was down 3.1 percent to 2,122 and to the U.S. East Coast down 1.6 percent to 3,279.
ACM/GFI noted that annual rate negotiations between shippers and carriers “should be in full swing now and carriers have plenty to be worried about. Load factors for both the Transpacific and East Coast are hovering in the 80 percent range, with some carriers reporting lower load factors in the 70 percent range – a much slower post Chinese New Year recovery than expected.
“In the short term, market participants expect volumes to start picking up towards the end of the month, just in time for the April 1 increase” announced by the Transpacific Stabilization Agreement.
“With rate levels at pre-Christmas levels, carriers will no doubt be desperate to garner some momentum to ensure a partial, if not full rate increase goes through. If this fails, a May 2013 rate increase announcement will no doubt be on the cards,” ACM/GFI wrote. - Chris Dupin