Container freight rates are showing a stable but soft pricing period, as the ocean shipping industry continues to consolidate and costs—brought on by greater efficiency—remain stable.
The World Container Index assessed by Drewry, a composite of container freight rates on eight major routes to and from the U.S., Europe and Asia, was down 1.1% to $1,179 per 40-foot container or equivalent unit (FEU) for the week ended Thursday and was 18.7% below the same period in 2017. Drewry said it expects the rates to soften more next week.
The average composite index of the World Container Index, assessed by Drewry for the year-to-date, was $1,374 per FEU, which was $83 lower than the five-year average of $1,457 per FEU.
The transatlantic head-haul rate to New York stabilized, gaining $143 to reach $2,007 per FEU, from a drop of $136 the previous week, Drewry said. Rates from Shanghai to Genoa, Italy, fell $145 to reach $1,098 per FEU.
Similarly, rates from Shanghai to Rotterdam fell $34 for an FEU to $1,155. Rates on the Shanghai to Los Angeles shipping lane inched up $30 to reach $1,210 per FEU for the week, while rates on Shanghai to New York routes rose 1 percent to reach $2,398 per FEU.
Continuing a long-term period of consolidation that has seen the formation of ocean carrier groups, complementary acquisitions and service sector ventures, CMA CGM, one of the largest ocean freight carriers, said Friday it has reached an agreement to acquire an equity stake of nearly 25 percent in CEVA Logistics AG, a global leading player in the logistics sector. The equity investment takes place in connection with CEVA’s planned initial public offering on the SIX Swiss Exchange, also announced Friday and is conditioned upon its successful completion.
With this transaction, CMA CGM said it aims to grow its presence in the logistics sector, a vital aspect of global shipping.
Rodolphe Saadé, chairman and CEO of CMA CGM, said, “With this proposed investment in CEVA, CMA CGM makes a significant move, in line with its development strategy. CEVA is a major player in the logistics business, which is closely related to the shipping industry. Together, the two companies will also explore possible co-operations allowing us to propose an ever more differentiated and qualitative offering while integrating services beyond maritime transport.”
CEVA, with more than 56,000 employees in 160 countries, posted revenues of over $7 billion. CEVA provides end-to-end supply chain solutions, managing more than 9 million square meters of warehouses in more than 750 sites in the world. It is a major factor in freight forwarding, with a strong footprint in Asia. Its customer base includes leading players in the consumer and retail, including e-commerce, sector, as well as automobile, industrial and aerospace, technology and healthcare sectors.