FURTHER evidence of container shipping¡¯s recovery emerged last week, with a sharp jump in the transpacific element of the Shanghai Container Freight Index.
The China-US west coast component has climbed almost $300 per 40 ft box over the past fortnight to $2,395, while the rates to the US east coast are up by $333 per feu.
This latest signal that the rebound is gathering momentum follows a jump of almost 11% in Drewry¡¯s Hong Kong-Los Angeles benchmark index in the space of just seven days, along with positive volume and price statistics from the European Liner Affairs Association.
Publication of trade data from several different sources that shows a continuing improvement in market conditions comes ahead of quarterly results from several leading containership owners and operators this week.
AP Moller-Maersk, which owns Maersk Line and Safmarine, and APL¡¯s parent company Neptune Orient Lines will post their latest earnings on Wednesday and Friday respectively. Also reporting in the next few days are containership owners Seaspan and Global Ship Lease.
Last week, French line CMA CGM said it had returned to the black in the first quarter of 2010 after a massive $1.4bn loss in 2009, and now expects to produce significant full-year profits.
The Pacific is the trade lane in most urgent need of freight rate increases as far as the lines are concerned. Over the past year, collective losses are thought to have rocketed to as much as $15bn on that trade alone as revenue plunged around 30%.
Early indications suggest lines will return to breakeven in 2010-2011 after successfully raising contract rates agreed for the coming 12 months in annual contracts that were renewed at the start of this month.
Only a relatively small amount of cargo moves from Asia to the US on a spot basis, with rates likely to be somewhat different from those in annual contracts. Nevertheless, measures such as Drewry's benchmarks offer an indication of how the market is moving.
Although many trade lanes are back in to growth territory, the ELAA¡¯s latest numbers show that the recovery is patchy.
While volumes continue to pick up in the Asia-Europe trades, some routes remain under pressure.
Imports from the Australia and Oceania region to Europe fell more than 22% in March compared with the corresponding month of 2009, according to the ELAA, whereas liftings in the opposite direction were almost 10% higher. Imports to Europe from the Indian subcontinent and Middle East rose nearly 20% in March.
In contrast, exports from Europe to the subcontinent and Middle East were only up by 5.5% to 226,100 teu. Nevertheless, they are equal to half of the volume that moves from Europe to Asia on a monthly basis.
Mixed messages are also coming from the intra-Asia trades, where southbound volumes were up 23% in March, whereas northbound traffic only showed 3% growth.
Meanwhile, Israel Corp revealed last week that its liner shipping subsidiary Zim was hoping to raise $150m-$190m from the sale of assets.
Negotiations are being held with third parties about two transactions involving the disposal of Zim¡¯s holdings in foreign companies that are engaged in shipping-related activities but do not own vessels.