Rates make rapid recovery on January demand surge

THE rate of freight rate recovery has been far faster than anticipated because of a surge in demand in January and a shortage of boxes where they are most needed, reports Paris-based Alphaliner.

"The high spot market rates have come at a key period as contract rates for 2010 have also strengthened. Twelve-month contract rates for the Far East-Europetrades starting in January/February 2010 are reported to be about 200 per cent, higher than last year, reflecting renewed optimism about trade prospects," said the French shipping consultants.

China-to-Europe spot rates, as well as those to the US, east and west coasts increased 24 per cent in the past three months, said its weekly newsletter.

Higher vessel utilisation was marked in Asia- Europe trade lanes since Christmas, which has created repositioning problems here and there. But even that has boosted freight rates.

The Far East to Europe trade made the big gain, up 50 per cent since October from US$2,500 per FEU $3,700, according to the Shanghai Shipping Exchange.

"It remains to be seen if the rates are sustainable as the Lunar New Year holidays in China in mid-February could lead to some weakening," Alphaliner said.

Spot rates from Shanghai to the US west coast have risen 26 per cent in three months and are 17 per cent higher on shipments to the US east coast.

Asia-Australia and Asia-Africa spot rates also have risen over the past three months, but rates to the Middle East, especially to the Gulf region, remain under pressure.

The high spot market rates on the major trades from China to Europe and the United States have come at a key period as contract rates for 2010 have also strengthened, Alphaliner said.

(Source: www.schednet.com)