Asia-Europe Box Rates Slide Even Further, Carriers Now Losing Double What They Were Last Week

by Ship & Bunker News Team
Tuesday June 23, 2015

Based on data from the Shanghai Containerized Freight Index, the cost of shipping a container from Shanghai to Rotterdam has continued its fall by a further 15.6 percent over the past week to $205 per TEU, the Wall Street Journal reports.

The figure includes a bunker fuel surcharge of about $300 per TEU, meaning carriers are in effect paying twice as much as the $50 per TEU they were last week to move customers' boxes on the Asia-Europe trade.

"We are going through a relentless round of bleeding," said a senior executive of a major Asian operator.

"With the bunker-adjustment-factor surcharge at $300 for Asia-Europe, we are losing close to $100 per box. That's about double the loss from last week."

Jonathan Roach, a container analyst at Braemar ACM Shipbroking, estimates that overcapacity in the Asia-Europe trade loop is currently at about 30 percent.

"It's the additional capacity that is hurting freight rates," said Roach.

"Demand for container shipping grew a less-than-expected three percent in the first four months of the year, so it will be a very challenging environment that could test the carriers over the next two to three years."

Last week it was reported that container-freight rates on the Asia-to-Europe trade route had fallen to $243 per TEU, dropping below shipping companies' fuel costs for the first time in two years.

Ship & Bunker News Team
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