As spot rates on most shipping routes continue to rise – albeit at a slightly lesser rate than last month – there are increased reports of shippers with contracted cargo seeing their containers rolled at ports of loading.
Contract Renegotiations
Yesterday, spot freight rate platform Freightos published its latest survey of some 50 shippers and forwarders and reported: “that since early May, nearly 70% of BCOs and forwarders with long-term ocean contracts have had containers rolled or pushed to the spot market, or are facing contract renegotiations with carriers to increase their long term rate levels”.
“With capacity and equipment scarce and spot rates now several thousand dollars above long-term contract levels, annual agreements are once again becoming unreliable,” Freightos head of research Judah Levine said.
On an anecdotal level, one shipper told The Loadstar this morning that a major carrier with whom it is a named account on the Asia-Europe trade had “cut our allocation in half and even then there’s no space to book with our fixed rates – surcharges are double the freight”.
Poor Earning
Ironically, according to new research from liner analyst Alphaliner, the Asia-North Europe trade is actually the poorest earner amongst trades for carriers when measured on a revenue per teu per nautical mile basis.
An Alphaliner analysis of the price movements on the Shanghai Containerised Freight Index (SCFI) since it hit its record high in January 2022, found that shippers on the Shanghai-Durban leg currently pay the most, at just under “$0.70 for each of the 6,936 nautical miles (nm) of this trade route. This is the highest of all deepsea trades covered by the SCFI”.
Shippers on Shanghai-Rotterdam pay under half this per nm, the study found.
“Transport of spot cargo from Shanghai to North Europe is less rewarding. The longer sailing distance via South Africa results in an income of only $0.27 per nautical mile, which is the lowest amount in our review.
“However, this still represents a substantial increase compared to an income of only $0.08 per nm one year ago…”
Did you subscribe to our daily Newsletter?
It’s Free! Click here to Subscribe
Source: TheLoadstar
