The volatility of global spot freight rates since the start of 2015 has continued to increase in comparison to 2014, according to rate assessments on 11 routes gathered by the World Container Index (WCI).
Price turbulence on the globally important Asia to Europe routes has been high in 2015, with monthly volatility increasing 43% on average in comparison to 2014.
PTI previously reported that the increase in freight rates had given carriers some respite, having surged by around 153% between Asia-Europe.
The monthly volatility (a measure of how widely prices fluctuate in a 4-week period and therefore an indicator of the risk in a market) has increased by 14% on the WCI composite index, which is a weighted average of all 11 underlying routes in the first 20 weeks of 2015.
Richard Heath, Director of WCI, said: “The two most volatile routes among the 11 we track are Shanghai-Rotterdam and Shanghai-Genoa, with weekly rate increases of US$1,000 or more seen during some weeks and monthly volatility of over 40% since the start of this year.”
Taking all routes into account, the WCI composite index went from $2,092 per 40ft container in late February, 2015 to $1,263/40ft in late April, before increasing again to $1,611 on May 14.
Philip Damas, Director at Drewry, which jointly owns WCI alongside Cleartrade Exchange, said: “The WCI assessed by Drewry tracks and documents what is an increasingly volatile market. The reduction of spot rates is welcome by most shippers, but many non-contract shippers are not currently equipped to cope with huge volatility in their freight costs.”
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 and is not financed or backed by either shipper or carrier interests.
The drop in freight reached near-record lows along the Asia-Europe route recently, with the container shipping industry forking in around $6 billion in 2014, up from $2.7 billion a year prior.