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Something Just Snapped: Container Freight Rates From Asia To Europe Crash 23% In One Week
One of the few silver linings surrounding the hard-landing Chinese economy in recent weeks has been the surprising resilience and strength of the Baltic Dry Index: even as Chinese commodity demand has cratered in 2015, this "index" has more than doubled in the past few months from all time lows, and at last check was hovering just over 1,100.
Many were wondering how it was possible that with accelerating deterioration across all Chinese asset classes, not to mention the bursting of various asset bubbles, could global shippers demand increasingly higher freight rates, an indication of either a tight transportation market or a jump in commodity demand, neither of which seemed credible.
We may have the answer.
It appears that the recent spike in shipping rates was analogous to the dead cat bounce in crude oil prices: a speculator-driven anticipation for a sustainable rebound that never took place. And now, just like with crude prices, it is all crashing down.... again.
According to Reuters, shipping freight rates for transporting containers from ports in Asia to Northern Europe dropped 22.8 per cent to $400 per 20-foot container (TEU) in the week ended last Friday, data from the Shanghai Containerized Freight Index showed.
Freight rates on the world’s busiest shipping route have tanked this year due to overcapacity in available vessels and sluggish demand for transported goods. Rates generally deemed profitable for shipping companies on the route are at about US$800-US$1,000 per TEU. In other words, at current prices shippers are losing half a dollar on every booked contractual dollar at current rates.
According to Shanghai data, it was the third consecutive week of falling freight rates on the world’s busiest route. Container freight rates have so far increased in 5 weeks this year but fallen in 23 weeks.
In the week to Friday, container freight rates fell 24 percent from Asia to ports in the Mediterranean, fell 4.4 per cent to ports on the US West Coast and were down 3.7 per cent to ports on the US East Coast.
Maersk Line, the global market leader with more than 600 vessels and part of Danish oil and shipping group AP Moller-Maersk, was one of the few container shipping companies to make a profit last year. The company controls around one fifth of all transported containers from Asia to Europe.
Should the dead cat bounce in shipping rates indeed be over, and if the accelerate slide continues at the current pace, not only will shippers mothball key transit lanes, but the biggest concern for global economy, the unprecedented slowdown in world trade volumes, which we flagged a week ago, will be not only confirmed but is likely to unleash yet another global recession.
Unless, of course, central planners learn how to print trade and quite soon at that...
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He's currently trying to figure out how he lost 5 million bucks in Bitcoins.
I'm no Bitcoin fan, and fully believe it's just another Ponzi. Never have I invested in Bitcoin nor would I in the future.
Shipping rates will pick up again once they start shipping more robots.
Watch intercontinental airfares closely.
SHEMITAH!
What?
Shemitah man.
The jews decide to crash the economy this year.
Yay for the Jews. Anything I can do to help, just let me know.
Wipe that blood off their hands, would ya?
you could help if you'd stand in front of a bulldozer, that is taking out yet another Palestinian farm for a shopping mall/condos-
gazoontite
During Shemitah farm fields are left fallow. As in, no one works.
Its just a sabbatical. 100% unemployment is a sabbatical.
Fuck
Executives making billion dollar bonuses have zero need to buy the shit and everybody else who might even need the shit is going bankrupt and can't affford the buy the shit.
I said it before and I'll say it again: Fuck a bunch a people.
Everybody is fucked. All of em, even the billion dollar bonus muthafuckas.
You'd think after all this time we'd finally get past this eye for an eye shit.
If you had your shipment of Chinese gold coins on that boat not only would the shipping have been cheap but your gold would now be safely in deep storage.
*China is going after malicious container freight sellers*
Bring it on, and the sooner the better.
Let's get this re-set show on the road!
so who owns the ships? greece owns a few ships. the northern europeans do to.
there is huge labor overcapacity in the first world. germany has the right idea with the 32 hour work week and a lot of time off for a full time paycheck. that employs 25% more labor. the usa is moving towards a "free market" solution. congress drafted bills encouraging part time work. if an employee works more than 20 hrs/wk the cost of an employee rises dramatically. so the usa, sort of passive aggressively, but with intent, to make part time work the normal job but with part time pay. fucking brilliant! ......and the contract employee, employee on demand, labor pool, first one there at 4 am is guarenteed a job. so labor is competing against itself for work beating labor rates down amongst themselves. fucking brilliant!
The Cass Freight Index: A Measure of North American Freight Activity
Miramar Ship Index
Freight Rate Index
The Baltic Dry. I do my homework. I suggested that there would be some new charts Tyler.
I'm just getting started. ;-D
check harpex too
BDI has been overdone to death
I just shipped some boxes of stuff to Asia. It was $75 per 2 ft cubed size box, regardless of weight (so I sent some rocks).
They go on a pallet and then into a container. Takes a slow boat but gets there less than 90 days to your door (so I sent some rocks). I know a guy who disassembled a noisy gas lawnmower and shipped it in one of those boxes last year from the US to his place next to mine. Every Saturday morning the unlucky bastard keeps hitting rocks with his new lawnmower.
avg home price in San Fran now is 1.3million up 35% above the old 2007 high. Economy must be awesome. Guess that is why IBM, Cat, MCD etc. have declining sales for years.
Bullish. Another obvious sign of a robust global economy. It is totally normal for industries to collapse in seconds. For real...has gold ever looked better in recent memory?
Bullish. Another obvious sign of a robust global economy. It is totally normal for industries to collapse in seconds. For real...has gold ever looked better in recent memory?
I don't know if anyone has noticed, but some of those containers are falling off that vessel.
Their contents spilling into the sea!
Thanks for noticing Capt. Obvious!
It's a Union thing. Fuggedaboutit.
But but but ... Sydney House Prices Soar to Biggest Gain in 13 Years ...Sydney house prices soared in July by the most since December 2002, underscoring why regulators are cracking down on property investors LOL.... Buyers have scooped up property following the central bank’s two interest-rate cuts this year to a record-low 2 percent as ..ROFL
http://www.bloomberg.com/news/articles/2015-08-03/sydney-house-prices-so...
An advice to all Australians: BUY A HOUSE BEFORE YOU ARE PRICED OUT FOREVER, THEY ARE NOT MAKING ANYMORE LAND, REAL ESTATE NEVER GOES DOWN!!!
Dude the United States in in college now. We don't need none of that junk anymore.
[containers from ports in Asia to Northern Europe dropped 22.8 per cent to $400 per 20-foot container (TEU)]
What does that convert to in Ood?
http://img1.wikia.nocookie.net/__cb20090722202208/tardis/images/0/0c/Ood...
wtf is that?
Rogue wave hit that containership?
Your new ipad is in the container hanging upside down over the railing. No worries, it'll be fine.
Jeez, I hope so.
The front part of that container is where 48 former Foxxcon workers are living until they get to the US.
"Okay, we open door now...look Mexican."