A price rise in Asia-Europe container rates but analysts now fear for September GRIs

Asia- Europe sea carriers will be frustrated with the influence of the vessel spot rate of the impending $1,000 September 1st general rate surges. They had tried to reinforce by the more blanked sailing and the latter deduction of the one 2M service string.

Today Shanghai Containerized Freight Index (SCFI) for the North European and for the Mediterranean seaports show an increase of $122 per teu and $248 per teu. It stimulates the spot rates of Asia-North Europe to $591 per teu and Asia-Mediterranean to $697 per teu.

The month of August shows a $400 per teu spike in spot price to North Europe in the first week of August’s GRI and it’s also about $1,000 per teu, but in the next weeks this was given back to transporters, again against a background of a fictional peak season. According to the analysts the impact of the September GRI to be momentary, as a demand of cargo drops severely again in October ahead of the Golden Week holiday in China.

In the meantime, Alphaliner gives a point of view that the sea cargo carriers have cancelled 75 sailings from Asia-North Europe this year, as compared with only 28 blanked trips over the January to August of 2014. However, it said that there is still 2.3% more capacity on the trade lane due to the distribution of a fleet of gigantic ships in place of mandatory small tonnage.

Moreover, head haul demand on the route drop by 3.5% January to June of the year, as compared to previous year 2014, and the signs are that this could drop more as China’s exports tanked by a year-on-year 8% in July.

It is hard to understand that what other options carriers have then to terminate even more sailings to Europe and consider temporarily laying-up some of the large ships until the improvement of the trade.

The economic view for vessel lines working the biggest trade lane of the world in the second half of this year 2015 cannot be inspiring. Suitable results at the H1 stage posted by a number of carriers were only attained due to a stellar performance in the first quarter of the year. The only saving grace for carriers is that bunker fuel prices have dropped another time, under $200 per ton, transporting unit price decrease further, but the fault of oil is also an indication of the uncertainty sweeping goods markets which is not a good  news for international trade.