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Recycling export boost as shipping rates sink

Shipping rates for transporting containers from Asia to Northern Europe have fallen by almost a quarter as the global slump in trade continued into August.

According to the Shanghai Containerized Freight Index, shipping freight rates from Asia to Europe per 20ft container (TEO) fell by 23.3% to $640 (£410) in the week ending 14 August, following a 24.9% fall the previous week.

Overcapacity concerns have led to a number of shipping lines removing vessels from service due to weak demand. The 2M alliance Maersk and MSC has removed the AE9/Condor service from their Asia to Northern Europe route.

Exports from China fell by 8% in July compared to the same month in 2014, with almost all Asia volumes down on the same levels a year ago.

The fall in shipping rates is being seen as a surprise as the summer period is usually the strongest time of the year, boosted by pre-shipments for the Christmas season. Rates generally deemed profitable for shipping companies on the route are at about $800-1,000 per TEU.

The demand and number of ships operating from East to West impact on the rates Western exporters of recycled materials receive for their products.

In a statement, the Environmental Services Association said: “Any reduction in costs associated with the sale of recyclates is positive for the industry.

“Overseas export of recyclates relies on reverse logistics and is therefore linked to trade more generally, which is another reason why a drop in shipping rates is likely to be beneficial. However, with any market fluctuation it is of course hard to know how long the change in price will remain.”

 


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