Asia-Europe spot rates soared last week as carriers took a hard line on the July 1 price increases against a background of weak market fundamentals, according to Drewry Maritime Research.

The World Container Index's Shanghai-Rotterdam freight rate assessment increased by 165 per cent, or $1,632 per FEU to $ 2,622, 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 a month, has confirmed that the 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 Mr Richard Heath.

"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," said Drewry analyst Mr Martin Dixon.

Drewry stressed that week-to-week increases in rates are less significant than how long increases can survive, and urged shippers to consider adopting index-linking as a mechanism to avoid contract default in the current environment of major price volatility.

In the week before last, the WCI had fallen to a 19-month low 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, it said.(Source: Exim)