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EAST-west
trade freight rates have fallen dramatically
since the beginning of the year, but are
still firmly above the lows of 2011 and
2009, according to data released by Drewry
Maritime Research.
In
a recent webinar presentation by the maritime
consultancy group entitled "Are you
confused by ever changing freight rates"
Drewry revealed that freight rates across
all east-west trades today stand at a collective
index reading of roughly US$2,000 per FEU.
This
figure is well down from the estimated $2,600
per FEU recorded at the beginning of the
year, as shown in the graph below...
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to enlarge
We
can also see that the peak rate over the
course of the period covered was close to
$3,200 per FEU in mid 2010. This is a full
60 per cent higher than the average east-west
rate today.
For
Drewry, its analysts argue that freight
rate volatility has increased in recent
years, which is really saying something
when one considers how volatile rates have
been historically in the container shipping
industry.
Back
in 2006 Hong Kong Shipping Gazette conducted
a study on the volatility in freight rates,
on both the transpacific and Asia-Europe
trades between 1994 and 2005. Our conclusion
back then was that rates over that 12-year
period were somewhat volatile on the transpacific
and very volatile on the Asia-Europe trade.
Examples
of volatility on the Asia-Europe trade included
a rate slide of roughly $600 per TEU between
the third quarter of 2000 and early 2002.
Essentially, the average freight rate continued
dropping quarter after quarter for over
one year.
It
then rose by just under $600 per TEU between
early 2002 through to mid 2003. On the transpacific
it was a similar story, yet the transpacific
rates never dipped as low as those on the
Asia-Europe trade.
What
we see in Drewry's chart for the east-west
trades combined today is far more volatile.
Whereas rates previously would rise and
fall by $600 per TEU over the course of
a year before beginning to change direction
again, today rates can change by as much
as $2,000 per FEU (or $1,000 per TEU) over
a similar and often shorter time frame.
Drewry's
analysts believe that the increased volatility
in rates today, which at its most dramatic
saw a trough of $1,300 per FEU and a peak
of $3,200 per FEU between 2009 and 2010,
has come about due to three primary reasons.
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