Spot container freight rates from North Europe to China increased by 45% this week, reaching a four-year high.
The “World Container Index assessed by Drewry” market reading on the route from Rotterdam to Shanghai jumped to $1,076 per 40ft dry container today, from $740 last week.
“Our sources reported that ships are currently full and that carriers have demanded much higher rates – only some prior rate agreements remain in place,” said Philip Damas, head of Drewry’s logistics practice.
It is highly unusual for the “backhaul” route from Europe to Asia – where vessels normally have load factors of less than 70% – to see such spikes in rate levels and capacity shortages. In Drewry’s opinion, the sailings cancelled by carriers in China following Chinese New Year contribute to a capacity crunch which has now reached Europe.
By contrast, rates on the route from China to North Europe continue to level off, with reported average prices of $1,643 per 40ft container today, down from $1,756 last Thursday and $2,212 on 12 January.
This week, the composite index of the “World Container Index assessed by Drewry”, which takes into account rates on 11 routes to and from Europe, the US and China, is 110% higher than this time last year, when the container shipping market was facing weak traffic volume and a price war.
Through the “World Container Index assessed by Drewry”, Drewry provides an independent index which is used by many companies for index-linked contracts. The latest jump in the Europe-to-Asia index will mean that shipper contract rates governed by an index mechanism will be adjusted upwards in the next few weeks.
Besides advising on and providing spot freight rate indices for index-linked contracts, Drewry Supply Chain Advisors works for beneficial cargo owners on benchmarking contract rates and best practices in ocean transport procurement and runs optimisation-based ocean freight rate tenders. Drewry Supply Chain Advisors is the logistics practice of the Drewry group.