Overcapacity fears depress spot rates, but end in sight: BIMCO

ASIA-EUROPE spot rates - Shanghai to Europe - declined to US$1,000 per TEU last week, continuing an overall slide since the third quarter of 2010 in the face of overcapacity as more tonnage joins the global container fleet.

The spot index dropped to $992 per TEU, down $27 per TEU from the week before, according to the Baltic International Maritime Council (BIMCO). "Rate cuts are ongoing as liner companies struggle to fill their vessels," said the Copenhagen-based group's analyst Peter Sand.

Mr Sand said low volumes have prompted intense competition for market share on Shanghai - Europe run and other main Asia-Europe trade lanes, reported Newark's Journal of Commerce. While the overall decline has been noted from mid-2010, there was a brief uptick with short-lived rate hikes at the start of 2011, but falling 29 per cent since January.

"We might go into the peak season in the third quarter before sustainable spot rate levels on Shanghai-Europe are back," he said.

Mr Sand also noted that after five weeks of significant rate cuts, the decrease this week is much smaller. "Sliding rates could be terminated over the coming weeks," he said.