Asia-N.Europe freight rates at lowest since 2009

COPENHAGEN (Reuters) – Shipping freight rates for transporting containers from ports in Asia to Northern Europe fell 23 percent to $342 per 20-foot container (TEU) in the week ending on Friday, traders with access to Shanghai Containerized Freight Index data told Reuters.

Freight rates on the world’s busiest trade route are now at the lowest level since the index began in 2009 and have more than halved this month, hit by an overcapacity of vessels and sluggish trade.

Shipping companies have sought to increase rates dramatically on the spot market, and sometimes they have succeeded in applying the rises – as seen in the 150 percent increase in the Index for the route in May.

Global leader Maersk Line said it would increase spot rates by $800 per TEU from June 1 and the world’s thirdlargest shipping group, France’s CMA CGM, said it wanted to boost rates by $1,000 from June.

But more often than not, these shipping giants are forced to accept far lower rates because of overcapacity.

“This latest fall has pushed rates on the trade to yet another all-time low, highlighting once again the fundamental weakness in the market,” said Richard Ward of freight and commodity derivative traders Freight Investor Services.

“Carriers had previously planned a GRI (general rate increase) for June 1 of between $800-$1,000 per TEU, however this week’s decline on the index suggests their latest attempt to boost rates has fallen flat.”

In the past week, rates for routes from Asia to the Mediterranean fell 19.8 percent, compared with the previous week, to $466 per TEU. To the U.S. West Coast they rose 8.1 percent to $1,526 and to the East Coast they rose 2.4 percent to $3,216.

Maersk, which is part of Danish oil and shipping group A.P. Moller-Maersk and has nearly 600 container vessels, was one of the few container shipping companies to make a profit last year.