Freight rates plummet after crash


Container shipping line efforts to increase spot freight rate levels appear to be in tatters after the main price index covering the route crashed this week.

Shanghai International Freight Index’s (SCFI) Shanghai North Europe base port rate came in at US$908 per TEU, a 14% decline from last week’s US$1,055 per TEU.

Industry observers and executives widely agree that US$1,000 per TEU is the break-even point for carriers.

However, as larger ships with lower cost-per-TEU slot levels are phased into service, this may need to be revised in the future.

Carriers and major shippers are preparing to begin negotiating annual contracts for 2015 as forwarders on the trade note that although the SCFI accurately tracks the market, it is by its nature delayed.

Hapag-Lloyd recently announced a figure of US$550 per TEU to take effect from October 15, and its G6 Alliance partner OOCL announced a GRI of $650 per TEU, while on the same day Maersk announced $450 per TEU, which becomes effective on October 1,2014.

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