HAPAG-Lloyd has become the latest container line in the North & East Asia-Australia trade to announce a new rate restoration, applying a US$300/teu increase from 1 November.
The rise applies to all cargoes and container types moving from, in the carrier’s definition, Korea, China, China/Hong Kong, China/Macau and China/Taiwan.
Theoretically, HLL already has two identical rises in process, scheduled to take effect yesterday (1 October) and on 15 October.
APL has announced a larger, US$500/teu increase from N&E Asia (also including Japan) to Australia, and US$300/teu to New Zealand, from 15 October, having previously applied a US$300 increase to Australia on September 1. OOCL has declared a US$300/teu rise on 15 October.
Carriers have been attempting to manage capacity and rate erosion by blanking voyages, suspending services and downsizing vessels throughout 2019 and have also been confronted by an anaemic and late southbound peak, which is reflected in trend figures reported by local container ports. Almost all services have cancelled voyages during what should be the busiest months of the year, from August onwards.
The China Containerised Freight Index, which measures average indexed freight rates (all-inclusive spot and long-term rates, excluding THCs) of 15 different carriers for shipments from Dalian, Fuzhou, Guangzhou, Nanjing, Ningbo, Qingdao, Shanghai, Shenzhen, Tianjin and Xiamen to Australia/NZ, last week rose very marginally from US$750.82/teu to 752.75.
Looking back, the December 2018 CCFI stood at 787.54, 13.3% below December 2017’s 908.40. At the end of January 2019 the CCFI had again eroded, to 766.94; by the end of February it was 718.82. At the end of March it was down 18.6% year-on-year, to 722.84. The average CCFI for June was 607.57, down 23.6% on June 2018, and at the end of July 2019 – the theoretical beginning of peak season – the index had risen to only. At the end of July the CCFI was 646.62.
The container industry’s other major indicator, the Shanghai Container Freight Index, measures average USD spot rates (all inclusive, but excluding THC) of 15 different carriers for shipments from Shanghai, to base ports in the area of destination, in this case Melbourne. The December 2018 SCFI fell to US$587.00/teu, compared to 676.80 in November. However, the comparison with December 2017 is stark: a 50.4% fall from 1,184.20. By the end of January 2019 the index had fallen further, to 532, and a month later was just 383. The average for March was 376.80, or 61.3% down year-on-year.
The average index for June was 264.25, 63.9% down on the previous June, although there was a substantial improvement in spot rates by the end of July, to US$525, and by the end of last week the SCFI had almost doubled, to US$923.
Despite the rate recovery there are expectations a rationalisation of N&E Asia-Australia services is imminent.