Leading forwarders are not expecting any recovery in demand or freight rates on the Asia-Europe container trades for the next three months, as the shipping industry enters its traditional slow season and the impact of early restocking takes effect.
Box rates on the Shanghai to northern Europe lane have been falling for four months and are now more than 30% lower than during their February peak.
Speaking exclusively to IFW, Claus Schensema, MD of GAC Forwarding & Shipping (Shanghai), predicted a "definitive softening" of the ocean sector for exports out of China in the coming months, with lines already indicating winter lay-ups.
"Q4 2010 has already seen a drop in volumes, with many clients ordering way ahead of their traditional schedules in fear of price hikes and lack of capacity," he said.
Paul Tsui, Chairman of the Hong Kong Association of Freight Forwarding and Logistics, said downward pressure on rates was continuing to build.
"Rates have been going down for at least 7-8 weeks," he told IFW.
"There are only a few ships leaving Hong Kong and China with full loads, most are running at 70-80% utilisation."
"I expect rates will continue to fall for the next four weeks at least. "
"They might stabilise in the build up to Chinese New Year, but with more newbuildings due to be added to the fleet, rates could fall again after the [February] holiday."
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