Spot rates still tumbling, but carriers 'can still make good money'

Container spot rates from China to Europe and the US tanked again this week, leading to heavy discounting by carriers and prompting some to offer significant mid-term reductions to contract rates.

Ahead of the Chinese Golden Week holiday, the Ningbo Containerized Freight Index (NCFI) weekly market commentary reported that vessel export load utilisation levels were “poor”, and that “the decline in freight rates was difficult to stop”.

Drewry’s World container Index (WCI) Asia-North Europe component lost another 10%, to $5,441 per 40ft, while its reading for Mediterranean ports saw a huge 19% decline, to $5,216 per 40ft.

Moreover, one UK-based NVOCC told this week he had received an offer of $4,500 for a 40ft from Shanghai to Southampton from an alliance carrier.

He added: “I can’t see any reason why anybody would be shipping under contract at the moment, as the lines have plenty of space they need to fill and can still make good money out of these lower spot rates.”

Another forwarder contact said he thought Maersk was suffering more than some of its peers from the market pivot, adding: “I hear their contract volumes are well down, and they have been slow to tap the spot market. And, on top of that, they have the strikes at Felixstowe to contend with.”