PEAK season is over, the US port strike has been suspended, and newbuildings are still flooding into the market, so spot rates should continue to slide. And yet, they haven’t, according to the Shanghai Containerized Freight Index.

The SCFI jumped 6% in the week ending Friday versus the prior week, to 2,185 points, its highest level since the week of September 20. It was the first sequential gain in 11 weeks, and the largest sequential gain since the end of June.

Increases were overwhelmingly weighted to Asia-Europe trades. The SCFI put the Shanghai-North Europe spot rate at $4,452 per feu, up 14% from the prior week, and the Shanghai-Mediterranean rate at $5,110 per feu, up 10.5%.

The transpacific showed much slimmer gains, with the SCFI’s Shanghai-US east coast rate at $5,099 per feu, up 3% from the week before, and the Shanghai-US west coast rate at $4,783 per feu, up 1%.

Carriers pushing for GRIs in November

According to Jefferies analyst Omar Nokta: “Ocean liners are aiming to push through November GRIs [general rate increases]. The SCFI appears to be pricing in a successful push higher ahead of their implementation.”

Peter Sand, chief analyst at Xeneta, commented: “Heading into November, carriers will be pushing hard for the announced GRIs to turn the tide. But it may only be temporary because gravity is likely to prevail and see spot markets soften further.”

Xeneta assessed average Asia-North Europe spot rates at $3,341 per feu as of Thursday, flat versus the week before. “The sideways movement in spot rates to North Europe seems to come about as carriers try to keep the heat on freight forwarders and shippers with a raft of GRIs being pushed for November 1 implementation,” said Sand.

The other main east-west lanes also showed signs of stability in the past week, according to Xeneta. It put Asia-Med rates at $3,446 per feu, down 2% week on week; Asia-US east coast rates at $5,869 per feu, down just 1%; and Asia-US west coast rates at $5,349 per feu, also down 1%.

According to Sand, the Asia-US west coast trade “seemingly faces fewer troubles than any other major trade lane”, but the Asia-US east coast lane is still “troublesome” due to the threat of renewed strike action starting January 15.  

Meanwhile, Red Sea diversions still appear to be providing rate support to European trades almost a year after the Houthi attacks began.

Maersk said in a customer advisory on Thursday: “The ongoing situation in the Red Sea… continues to cause industry-wide disruptions, including delays at ports. We are experiencing industry-wide equipment and capacity shortages, as well as long-term additional costs and strong demand from our customers.”

As a result, Maersk is hiking its emergency contingency surcharges on voyages from the Middle East, India, Pakistan and Bangladesh to European destinations starting on November 1. Surcharges for 40-ft containers are being increased by 27%-74%, depending on the country of origin.

No upswing yet according to WCI

Different spot-rate indexes use different methodologies and poll different sources, thus producing different numbers. But they show the same broader trends over time.

The current trend is still not clear, because not all indexes are moving in the same direction yet.

The SCFI shows a significant gain for Europe-bound trades, while Xeneta shows a stabilisation but not a rise. FAK assessments from Platts mirror the SCFI, also showing notable gains recently for European lanes, while the spot rate indexes of Drewry are still declining.

According to Platts, North Asia-North Europe FAK rates fell steadily over recent months, bottoming out at $2,900 per feu on Wednesday, then jumped to $4,100 per feu on Thursday and Friday. Platts’ North Asia-Med assessment bottomed at $3,200 per feu on Wednesday, then rose to $4,100 per feu thereafter.

Platts’ assessments for North Asia and Southeast Asia to the US east and west coasts were generally flat, in line with the trend shown by the SCFI and Xeneta.

Not so with Drewry’s World Container Index. It put Shanghai-Los Angeles spot rates at $4,814 per feu for the week ending Thursday, down 3% week on week; Shanghai-New York rates at $5,266 per feu, down 6%; Shanghai-Rotterdam rates at $3,132 per feu, down 7%; and Shanghai-Genoa rates at $3,296 per feu, down 4%.

One possible explanation for the disparity is that the WCI sometimes lags the SCFI. According to Platts’ data, the rate increase to Europe came late in the week, so the WCI might show the gain in next week’s indexes. Another possibility is that gains shown by some indexes are just a blip and the downward trend seen since July will reassert itself.

What all the indexes agree on is that spot rates, though down from summer peaks, are still at very profitable levels. At this time last year, before the Red Sea crisis began, there were widespread concerns that 2024 freight rates would be mired below break-even.