As spot rates move upwards analysts are encouraging shippers not to be “spooked” by November general rate increases (GRIs), reports Seatrade Maritime.
Composite index
Drewry Shipping Consultant’s WCI composite index showed a 4% week-on-week bulge, almost entirely due to the Asia to North Europe and Mediterranean rates which increased by 8% and 11% respectively.
James Hookham, the director at the Global Shippers’ Forum, agreed: “We shouldn’t read too much into one week’s figures, I don’t think this will change the negotiations for contracts.”
Xeneta’s chief analyst Peter Sand urged shippers to hold firm in contract negotiations as the overall direction of travel for rates in the container shipping market was downwards.
As European importers are locked in contract negotiations the broader picture reveals that average spot rates from Asia to North Europe and the Mediterranean are $3,396, up from $3,132 and $3,648 per feu, up from $3,296, respectively, according to Drewry, but Heaney pointed out that these rates were still around 50% lower than the July peak.
Sand said that the spread between spot and contract rates had now narrowed to just $389, but he added, “most importantly for shippers, it is because the short-term market is falling rather than the long-term market rising.”
Fleet growth
In comparison fleet growth since January this year is up 8%, to 29.81 million teu, from 26.97 million teu a year ago, while the idle fleet stood at 0.5%, compared to 3.3%.
Perhaps most pertinent for the coming year is the current orderbook, which currently stands at 7.96 million teu, up from 7.93 million one year ago, however, there have been 2.73 million teu in deliveries since 1 January this year according to Braemar data.
Xeneta points out that both the shipping lines and their customers can adopt “compelling arguments” with the carriers pointing to rates that remain 224% above the spot rates of one year ago, while shippers will accentuate the current trajectory, which has seen spot rates decline fast since mid-July, in spite of continued demand growth.
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Source: Seatrade Maritime
