Shanghai Containerized Freight Index Totally Collapses, Top Carriers Wage Price War to Form Global Shipping Oligopoly
by Wolf Richter
WolfSreet.com
June 17, 2015
This is what two unnamed container shipping executives, one from an Asian carrier, the other from a European carrier, told the Wall Street Journal about the containerized-freight fiasco on the China-Europe route:
“We are now shipping at an absolute loss. With the bunker-adjustment-factor surcharge at $300 for Asia-Europe, we are losing more than $50 per box.”
“Unless by a miracle demand grows, we are up for heavy losses in the next quarter and maybe the rest of 2015.”
The rate for shipping a container on that route, after plunging for months, is now below even the cost of fuel.
The China Containerized Freight Index (CCFI), which covers spot market rates and contractual rates from Chinese ports to major destinations around the world, dropped another 1.2% last week, to a multi-year low of 851.4. The China-Europe component dropped 2.5%. The CCFI is now 21% below where it was in February, and 15% below where it was in 1998, when it was set at 1,000!
The Shanghai Containerized Freight Index (SCFI) paints an even drearier scenario. Unlike the CCFI, it is composed only of spot rates, not contractual rates, from Shanghai to the rest of the world. And this babe plunged 6.8% last week to 581.25, an all-time low, 42% below where it was during the Financial Crisis, on October 16, 2009, when it was set at 1,000, and down 47% from February.
The Rest…HERE
