Europe – Fare East and Transpacific Trade The Shanghai Containerized Freight Index (SCFI) breached the 3,000 point mark for the first time ever in May, following several consecutive weeks of rate increases. The index, that shows the evolution of average spot rates for Chinese exports, now stands at a record high of 3,343 points. Average spot rates from Shanghai to North Europe went up by 16% in May. This already huge increase excludes premiums of several thousands of dollars that shippers usually have to pay to secure an empty container and booking guarantee. Spot rates on the Asia – Europe trade started rising again the week after the Suez Canal incident which blocked all traffic for a week.
This delayed ships on the Asia – Europe services by one or two weeks, resulting in port congestion in some major ports and slowing down the repositioning of empty boxes. The Suez blockade has also impacted the Asia – US East Coast trade where spot freight rates increased by 12.9%, another record level. Transatlantic Trade Average freight rates in the North Europe to US East Coast trade have increased by more than one third in May. Increased US imports, port congestion and a lack of container and available ships have created a situation where cargo demand far exceeds available capacity.
Contrary to the Europe – Far East and Transpacific trades which have profited from booming Chinese exports, the Europe – North America trade has remained in stagnation for a long period. Carriers have transferred as much capacity as possible to the two biggest East-West trades, which means that no ships are left now to deal with a surge in European exports to North America. Average weekly capacity in the Asia to North America trade shows a massive increase of 47.6% compared to May 2020. The current offering on Far East – Europe is up 24.6% on a year-on-year basis. Several carriers have reacted to the volume surge on the North Europe to North America trade by deploying extra loaders and upgrading services with lager vessels. Transatlantic rates might expectedly continue their rise. Higher Peak Season and Equipment Imbalance Surcharges are announced to be implemented in June.
Source: DHL Global Forwarding