Asia-Europe container freight spot rates hit new highs

Container spot freight rates from Asia to northern Europe have broken the $2,000 per teu level for the first time in a decade after rising by more than a quarter this week.

The Shanghai Containerised Freight Index reported rates of $2,091 per teu on the Asia-northern Europe trade. The last time rates were this high was during the “dead cat bounce” that followed the global financial crisis, when rates topped £2,100 per teu in May 2010.

Asia-Mediterranean rates rose slightly less this week, rising $422, or 23.5%, to their highest recorded level of $2,219 per teu.

But these rates may not set records for long, with Xeneta reporting rates indicative levels of $2,100 per teu on Asia-Europe trades for December.

“The sky-high prices combined with full ships, record demand and lack of equipment have been a common problem on the transpacific eastbound for the past few months,” Xeneta said.

“The same issues are now observed also on the China to Europe trade. With no material change on the supply and demand components, we expect these prices to be sticky for the remainder of the year/peak season and possibly well into the new year.”

Analysts at Platts noted that freight rates from north Asia to the UK had risen significantly and were expected to see further upside ahead of the new year.

“The deadline for the UK leaving the EU customs union looms large and UK-based importers are seeking to fill warehouse space ahead of this event,” Platts said.

“With fewer than 50 days to go until the UK formally leaves the EU customs union, and with the picture still murky as to what shape the future relationship will take, importers are seeking to bring in goods ahead of the deadline in an effort to be well prepared for a potential no-deal scenario, which would see the UK leave the customs union with no formal deal in place.”

This had resulted in a significant spike in demand in recent weeks, leaving container rates from North Asia to the UK significantly higher, with carriers reporting front-loading of cargoes.

“On top of this increase in demand come logistical problems at UK ports, which are struggling to deal with the influx of demand, resulting in significantly longer wait times at UK ports, further affecting the rising freight rates,” Platts said.

“Some carriers are imposing congestion surcharges on this route on top of the already rising base ocean freight rates.”

Asia-Europe container freight spot rates hit new highs

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