It is from latest sea cargo news – The spot rates of freight services continued declining since from 15 weeks, due to volume declination. As the spot rates continued declination, revenue of the shipping companies is highly affected. Carrier freight services are feeling helpless to erode the revenue back again. The main reason behind the fall of container spot rates was declination of head-haul volumes. At the same time, China’s golden week holiday has shown much impact on trades, reporting continuous declines. Immediately after golden week holiday of China, carriers providing freight services from Shanghai Containerized Freight Index reported further decline on two biggest trades of SCFI. It is known from a source that the spot rates of freight services between North Europe and Shanghai dropped by 54 dollars this week, reporting 259 dollars per teu as a final value. It is the least spot rate reported this year compared to all declined values spot rates. At the same time, the spot rates of Mediterranean ports dropped by 69 dollars, reporting 224 dollars per teu as a final value. Despite following better fundamentals of the market, the spot rates of freight services belonging to Transpacific also continued declination. The spot rates declined to 94 dollars and 119 dollars towards the west and east coasts of US. It is seen the spot rates went down reaching 1,197 dollars per 40 feet for Pacific coast and reported 2,199 dollars per 40 feet for the Atlantic.
With these records, it is clear that the recent GRI proposed by Asia-Europe carrier companies on September 20th has no impact on the spot rates of freight services. It is noticed that the GRIs of 1000 dollars forcing the spot rates to increase for about two weeks at the beginning of the month, before reporting the loss of gains and more while the remainder of the month. With these reports, carrier companies have decided to throw further GRIs in a range of 950 dollars to 1,200 dollars per teu, in between North Europe and Asia, which may come into effect from November 1st, 2015. The GRI proposals coming into effect from next month include UASC with GRI proposal of 950 dollars per teu and NYK with GRI proposal of 970 dollars per teu. At the same instance, K-Line decided to throw largest GRI of 1,200 dollars per teu. It is expected that the new GRI proposals would increase the spot rates of freight rates, which compared with the full world, would lead to 500 percent increase in spot rates. But FIS says it as a ridiculous expectation of anyone’s standards. FIS is the broker of London container derivatives.
FIS said that the large increase expectation is difficult to materialize and it is in hands of time, to which extent a meaningful increase will come into play, considering the flat reports of previous GRIs attempted by carrier companies. It is observed from Container Trade Statistics that volumes further declined by 6.7 percent in trades of Asia-Europe Shipping Rates compared to previous years. Even all the measures taken for improvement like capacity increase failed completely reaching traditional slack season. Last month, Soren Skou, the chief executive of Maersk Line, said that they are thinking to use more tools in order to report soft demand and a noticeable increase in volumes with excess tonnage. He said that they are thinking to withdraw two or four main strings of the east-west side in the last three months, along with a suspension of freight services and cancellation of sailings. The current situation of trades of Asia-Europe Shipping Rates reports that there will be a continuation in it, particularly in between Geneva and Copenhagen at least for few upcoming weeks.