Euro volatility continues to affect the supply-demand imbalance in the container shipping industry. Even though according to the latest Shanghai Containerised Freight Index rates to Northern Europe are at their highest since the end of January, while container prices to the Mediterranean reached their highest since the beginning of March. Overall freight rates on the global market almost doubled bringing some relief for the carriers. Although the SCFI demonstrates that Asia-north Europe rates surged some 177.2%, or $709, to $1,109 per teu, and those on Asia-Mediterranean routes by 178.4%, or $717, to $1,119 per teu.
This does not reflect the state of international trade but is brought about carriers’ efforts of cutting capacity on Asia-Europe routes to address supply-demand imbalance and Lloyds List is posing a question as to why those measures were not taken sooner. This could have significantly improved financial results of 2nd quarter for container shipping lines. Some of the reports already published indicate 28% drop in revenues for Hong Kong’s Orient Overseas Container Line and 22% for APL. Under those circumstances it is crucial for shipping lines to ensure that latest GRIs will hold this time around. With some rate erosions this policy has so far proved a success. However industry analyst’s SeaIntel points out that continuing fundamental supply chain imbalance will make it next to impossible for rate increases to remain in place. According to SeaIntel the 6-8% potential growth in transpacific volumes will be outweighed by already deployed capacity. In the meantime rates on the transpacific and Asia-Europe routes are falling and the latest SCFI Index stands at 749.62 down 72.77 points on the previous week.