ASIA-EUROPE spot rates have soared this week as carriers took a hard line on July 1 price increases against a background of weak market fundamentals, reports London's Drewry Maritime Research.

The World Container Index's Shanghai-Rotterdam freight rate assessment increased by 165 per cent, or US$1,632 per FEU to $2,622 per FEU, marking the latest of several huge price swings in the Asia-Europe container shipping market.

The weekly World Container Index (WCI) assessed by Drewry, which captures freight rates with a contract validity of up to one month, confirmed this week that July 1 rate increases have been largely accepted by the market.

"Over three quarters of the planned $1,000 per TEU rate increases were implemented, based on our market assessments in China and Europe," said WCI director Richard Heath.

Said Drewry analyst Martin Dixon: "We expect this rate increase to be partly reversed in the next few weeks. However, the price correction will also serve to forestall any further erosion."

Drewry stressed that week-to-week increases in rates are less significant than how long increases can survive.

By last week, the WCI had fallen to a 19-month low, tumbling to within $46 per FEU of December 2011's trough. If sustained, this week's increase brings Asia-Europe rates back to the same level they were in January.

Drewry urged shippers to consider adopting index-linking as a mechanism to avoid contract default in the current environment of major price volatility.