Carriers at a critical juncture as spot market flashes red signals again

After recording gains across the board last week, the container spot market indices are back to flashing red for the main east-west tradelanes.

It is confirmation that ocean carrier 1 November FAK (freight all kinds) GRIs (general rate increases), from Asia to Europe in particular, have run out of steam and only achieved a small percentage of the ask.

And this also explains why carriers have been obliged to make a final re-set attempt to push up spot rates on the route before the year closes by rolling out fresh, but identical, GRIs for 1 December.

Drewry’s WCI Asia-North Europe component slipped 4% this week, for an average of $1,227 per 40ft, and is 43% lower than the same week of last year.

Earlier in the week, the Ningbo Containerized Freight Index (NCFI) commentary flagged up the declining trend, reporting prices to North Europe and the Mediterranean had “fallen sharply after being briefly pushed up”.

Moreover, The Loadstar’s regular shipper contacts reported that Asia-North Europe carriers were back to discounting directly, after a period when pricing had been largely driven by NVOCC co-loaders.

One UK-based shipper told The Loadstar a top-three carrier had extended his heavily discounted rates from Dalian to Felixstowe through to a latest departure date of 4 January, with no December GRI.

And Singapore-based AGX told that getting the 1 December GRIs to stick was, in its opinion, “doubtful”.