Shipping costs leap on GRIs Increases:
Container & Roro shipping costs have risen appreciably in recent months having previously plunged to their lowest levels on record. But how uniform have these increases actually proved to be and how long will they last? Average global freight rates rose in July, according to Drewry’s online Container Freight Rate Insight (www.drewry.co.uk/cfri). Drewry’s Global Freight Rate Index, a weighted average
across all main trades excluding Intra-Asia, jumped 16% to $2,063 per 40ft, bringing to an end five consecutive months of falls. The previous month it had reached its lowest level since
November 2011, when rates were last on the floor. A doubling in Asia-Northern Europe rates was the primary driver behind the index’s recovery, but elsewhere pricing remained weak and retreated notably on North-South routes.
Spot shipping rates between Asia and Europe leapt almost three-fold in response to carriers’ 1 July GRI and rose again in August, thanks to a surge in peak season volume and tighter capacity conditions. Meanwhile, shipping prices into the Med held firm following a similar recovery in June.
Carriers were successful in lifting rates again in August following earlier rises and ships are sailing full, as evidenced by noted incidences of rolled containers. By contrast, carrier
attempts to raise pricing on the eastbound transpacific were eroded by subsequent declines. Drewry’s Hong Kong-Los Angeles Freight Rate Benchmark shows that half of the $200 per 40ft gain in rates achieved on 1 August had been eroded by the third week of the month. Backhaul trades to Asia and both legs of the transatlantic have remained largely flat, though pricing continues to weaken on the latter’s eastbound leg. But pricing has continued to weaken on the once fast growing North-South trades. The effect of new service introductions and larger vessels led spot rates from Yantian (South China) to Santos (Brazil) to drop 17% in July to $2,330 per 40ft, down 42% compared to the same period last
year. Southbound pricing from Asia to Oceania and South Africa also weakened.
Shipping the Middle East and Indian Sub-Continent recorded a drop in ocean rates on busier routes; the most notable being from South China to Dubai, where average freight rates retreated 13% to $1,440 per 40ft in July.