HONG Kong’s OOCL saw revenue from its Asia-Europe services collapse by 28% in the second quarter, the first indication of just how badly container lines have been hit by the freight rate rout.

The Hong Kong line disclosed that total liftings were down 2.1% in the April-June period, while turnover fell 9.3%.

The most eye-catching figure was the plunge in revenue in the Asia-Europe trades, where volumes shrank 12%.

In the coming weeks, other major carriers will report their mid-year results, with NOL figures due out on Thursday, providing further insight into the impact of the price war.

After a very brief respite at the start of the month when another round of general rate increases took effect, spot prices on major trades have fallen back again.

The Asia-Europe trades remain the most vulnerable to supply and demand imbalances, with the Shanghai Containerised Freight Index highlighting the severe weakness on this particular trade.

The China-north Europe component lost almost 23% in seven days, or $118 per teu, sliding to just $400.

This was the third consecutive weekly drop from the brief spike of $879 at the start of the month after rates had collapsed to as low as $205 in late June.

Rates on the China-Mediterranean trades also remain under severe pressure, declining by 24% to $402 per teu over the week.

Drewry’s weekly Shanghai-Rotterdam freight index paints an equally bleak picture, with rates now half of what they were at the start of the year and 12 months ago.

The  index “continued its downward trajectory, losing 15% or $173 per 40 ft from last week to reach $1,000 per 40 ft,” said Drewry. “Blank sailings, even during the peak season on this trade, failed to stop the rate rot. Although the pace of decrease slowed down, we expect rates to continue falling next week in the run-up to GRIs that are being announced for August 1.”

As Clarksons points out in its latest Container Intelligence Monthly, “the container capable fleet is projected to grow 6.5% in 2015, with the very large boxship sectors set to receive the majority of capacity growth”. This robust supply expansion “has contributed to a challenging supply-demand balance in the freight market so far this year, with freight rates down heavily from end-2014”.

In the the Asia-Europe trades, where box volumes fell in the first half of the year compared with the same period of 2014, “key liner alliances have announced capacity cuts in an attempt to lift freight rates from record low levels”.

While overall container capable capacity growth is expected to slow to 4.6% in 2016, deliveries of high-capacity ships will remain rapid, which could continue to exert supply pressure, warns Clarksons.

The struggle to achieve utilisation levels that would be sufficient to stabilise freight rates explains why carriers are eyeing Iran as sanctions are lifted.

A number of carriers are reported to be drawing up plans to resume Iranian services, with 2M partners Maersk Line and Mediterranean Shipping Co telling Lloyd’s List that they saw considerable business potential in the region, although no final decisions on service offerings have been made yet.

On the Pacific, the Drewry/Cleartrade Hong Kong-Los Angeles World Container Index fell almost 7% over the week to $1,156 per loaded 40ft container. Earlier in the year, rates on this route were above $2,000, while a year ago they were hovering around $1,800.

The latest drop represents a new post-2009 low, following last week’s slump.

The SCFI’s Shanghai-US west coast component was 4.4% lower at $1,123 per feu, with rates to the east coast dropping 3.7% to $2,538 per feu.