INDICATIONS that "the market may be starting to turn" and carriers' hopes of guaranteeing post peak season cargo are reported as the reason for the recent drop in the Shanghai Containerised Freight Index, which tracks freight rates from Shanghai to 15 trades.

The index fell 13.46 points to 1,513.60 in the week ending August 20 over the previous week. All-in spot rates for services to Europe declined to US$1,847 per TEU, down $20 over the previous week and westbound Asia-Europe rates slid $43 per per TEU over four weeks. Carriers in Asia are slashing freight rates and offices in Europe are expected to do the same, a forwarder told London's International Freighting Weekly.

Freight rates to US west coast ports were down $13 to $2,752/FEU and fell $11 to $4,139 per FEU to east coast ports. They dropped $10 to $1,819 per TEU to the Mediterranean and saw the biggest decline on Asia to east and west Africa trades, dropping $34 to $2,407 per TEU. Freight rates to Japan saw no change and fell by only $1 per TEU to Hong Kong. None of the 15 routes tracked by the index registered an uptick.

"I think you are going to see rates coming down - maybe not immediately, but in the next couple of weeks. The carriers are now openly saying they won't get another increase in this year, let alone the next month or so," the IFW quoted the forwarder as saying.

"Rates being offered to bigger importers seem to have dropped already by a couple of hundred dollars. It's got to the point where we are pushing our people in China for cheaper rates, because a few people have got them and, to stay at the top of the market, we need to get them as well," he said.

Concerned by slowing trade and expecting freight rates to fall before yearend, carriers are also reported to be increasing validity time for freight rates.