According to information released by Lars Jensen from Seainteligence, last friday’s freight rate index from Shanghai Shipping Exchange demonstrates the container carriers’ extremely disciplined approach to pricing in the current circumstances of the COVID-19 Pandemic.
The CCFI (Shanghai Shipping Exchange) contract rate index on friday was 10% above same time last year and has been 9-12% above for each of the past 6 weeks. Same for the SCFI spot index which was 9% above the same time last year and has been 9-23% above for each of the past 6 weeks.
In the same 6 weeks, the price for normal bunker fuel is down 50%. Even for the low-sulphur fuel, price has been more than 30% below the heavy fuel price from last year.
Furthermore, as is well-known, demand has collapsed in the market.
Both are elements which would normally have sent rates tumbling said Lars Jensen.
Although there is no certainty if there could be more (or how many) idle vessels coming 6 months similar to the actions taken last crisis (2008-2009), for now blank sailing is a necessary ingredient in preventing rate collapse.