World Container Index shows second large hike in Asia-to-Europe box rates in two months
Today’s Shanghai-to-Rotterdam container freight rate assessment from the World Container Index (WCI), a joint venture between Drewry and The Cleartrade Exchange, shows that container freight rates in the westbound Asia-Europe corridor increased by 28% this week, adding upwards pricing pressure on shippers only one month after the previous large rate increases, Drewry reports. The World Container Index’s Shanghai-Rotterdam container freight rate sub-index went from $2,654 per 40ft container on 29th March to $3,408/40ft on 5th April, a rise of $754 per feu.
Carriers in the key Asia-Europe headhaul trade had announced General Rate Increases (GRIs) of about US$400 per teu (or US$800 per 40ft container) from 1st April. The index shows that carriers were able to enforce the vast majority of the requested price increase.
Philip Damas, director at Drewry, said: “The World Container Index assessed by Drewry tracks and documents what is currently a dramatically volatile market. This week’s rate increase results not only from the reduction in Asia-Europe operated capacities, but also from the new carrier behaviour of announcing and sticking to large rate increases.” Today’s World Container Index takes into account the rate changes from 1st April.
Damas added: “Looking ahead, we must question how sustainable these high Asia-to-Europe freight rates are, given the latent capacity currently parked by carriers and tramp owners, and given the expectation of deliveries of large new ships from the shipyards.”
Drewry’s advisory arm, Drewry Supply Chain Advisors, is now speaking to European exporters who are facing similar increases in the Europe-to-Asia trade, as was the case for westbound shippers in recent months.
The World Container Index is used for index-linked contracts and can also be used for container freight rate derivatives. In addition to being an aide to seafreight procurement, the World Container Index is also used as a proxy and leading indicator for ocean carrier profitability and share prices.
Richard Heath, director of World Container Index, said: “Now is a good time for shippers who are worried about potentially large unbudgeted freight cost increases to ‘fix’ their future freight rates via a container freight rate derivative. Whereas many westbound Asia-Europe shippers have already been hit, eastbound shippers to Asia can still protect themselves against this risk.”
The World Container Index is the only weekly container pricing index based on actual agreed freight assessments reported by industry players in Asia, Europe and the US.
The World Container Index is not financed or backed by either shipper or carrier interests.
Carriers in the key Asia-Europe headhaul trade had announced General Rate Increases (GRIs) of about US$400 per teu (or US$800 per 40ft container) from 1st April. The index shows that carriers were able to enforce the vast majority of the requested price increase.
Philip Damas, director at Drewry, said: “The World Container Index assessed by Drewry tracks and documents what is currently a dramatically volatile market. This week’s rate increase results not only from the reduction in Asia-Europe operated capacities, but also from the new carrier behaviour of announcing and sticking to large rate increases.” Today’s World Container Index takes into account the rate changes from 1st April.
Damas added: “Looking ahead, we must question how sustainable these high Asia-to-Europe freight rates are, given the latent capacity currently parked by carriers and tramp owners, and given the expectation of deliveries of large new ships from the shipyards.”
Drewry’s advisory arm, Drewry Supply Chain Advisors, is now speaking to European exporters who are facing similar increases in the Europe-to-Asia trade, as was the case for westbound shippers in recent months.
The World Container Index is used for index-linked contracts and can also be used for container freight rate derivatives. In addition to being an aide to seafreight procurement, the World Container Index is also used as a proxy and leading indicator for ocean carrier profitability and share prices.
Richard Heath, director of World Container Index, said: “Now is a good time for shippers who are worried about potentially large unbudgeted freight cost increases to ‘fix’ their future freight rates via a container freight rate derivative. Whereas many westbound Asia-Europe shippers have already been hit, eastbound shippers to Asia can still protect themselves against this risk.”
The World Container Index is the only weekly container pricing index based on actual agreed freight assessments reported by industry players in Asia, Europe and the US.
The World Container Index is not financed or backed by either shipper or carrier interests.