Good morning All
I thought I should pass this market information on to you.
If you saw my last post, you saw that the GRI (General Rate Increase) of July 1st, which had been publicised by most lines at USD 1000/TEU (USD 1000/20 foot or USD 2000/40 foot) hit the market last weekend at just under USD 900/TEU, however it's always wise to see what happens in the first 2-3 weeks following the increase as it often settles (or collapses completely).http://www.lloydsloadinglist.com/freight-directory/news/asia-europe-rates-double/20018055732.htm?source=ezine&utm_source=Lloyd%27s+Loading+List+Daily+News+Bulletin&utm_campaign=b042c0254c-Top_Stories_8_July7_5_2013&utm_medium=email&utm_term=0_1a5c244239-b042c0254c-256747097
There are many factors which affect ths, the most important two being :-
1) container volumes compared with available space (are the ships operating near capacity or not), the old supply/demand equation
2) The time of year. Historically, peak season from Asia is from August-November and then another small peak as we run towards Chinese New Year when factories close for the week and there's a bulge in demand as Chinese shippers try to fulful orders before the shut down.
Last year, the huge rate increases came in in March and should, based on timing, have failed as they were in the weakest part of the Asia-Europe cycle (after Chinese New Year and before peak season in August) but somehow the increases stuck (maybe because the rates were so low and lines held firm on the March-12 increases).
So, fast forward to today, the GRI has weakened slightly, but only by USD 50/TEU, so the spot rate from Shanghai is now around USD 1350/TEU, having dropped as low as USD 550/TEU in mid-June.
If you have regular volumes, you really need to find out what rates you are paying in July (what increase has your forwarder passed on to you). We have relationships with around 7-8 forwarders and know the market so we aren't taking a GRI anywhere near the market rate but I suppose that's down to experience and knowing the right forwarders to work with.
Another thing to think about, the USD is strengthening again, it was below USD 1.49 this morning so if you're importing, especially from Asia your landed costs have just spiked but you could be paying a lot more than you need to. You know where we are!
Kind Regards
Andy Cliff
http://www.straightforwardconsultancy.co.uk/
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