Sea freight rates on the Europe-Asia trade lane have surpassed the Asia-Europe rates as of the last week of April after spiking in March, a trend that Xeneta said was highly unusual.
The global sea freight market intelligence service said it noticed the spike beginning on March 1 for the North Europe main ports-China main ports market average price.
Since then, the Xeneta index has continued to show a rising trend in rates for the route that, coupled with tight capacity, has had the industry “perplexed,” said the report.
“We have been monitoring the situation in our shipping rates index and have also received numerous feedback from our customers on the unusual high-rates challenge on this route.”
By the end of March, that trend for the loop had ticked up significantly, and rates finally exceeded, in the last week of April, the westbound rates by 17% for a 40-foot container. This is “unusual as the route has normally been stable and less volatile when compared to its westbound counterpart,” said Xeneta.
Comparing year-on-year data, it said that a 40-foot container type on the North Europe-China route was shipping at a market average price of US$507 on April 27, 2016, but that the same container type had an average price of $1,919 on April 27, 2017, or a hike of 279% in 12 months.
Still, Xeneta said it expect this peak in eastbound rates to begin to drop “in the very near future.”
“As the new alliances continue to settle or struggle with settling, [and] vessels complete their turnaround to the westbound routes, we do expect for the eastbound rates to normalize very soon, as well as the reported capacity crunches,” even as Xeneta cited the need for caution considering the continued unpredictability of the market.
“One thing is for sure, 2017 is so far still looking much stronger than 2016. With such unusual happenings like this reversal of rate levels on these routes it is still anyone’s game.”
Photo: Michielverbeek
