Container rate increases 'largest since 2008'

8th-Feb

Taken from http://www.ifw-net.com:

"Container rate increases 'largest since 2008'


Katerina Kerr | Wed, 8 Feb 2012

Alphaliner says carriers will face stiff resistance to biggest price hikes in years

The largest ever rate increases announced by main carriers on the Asia-Europe trade - their latest attempt to recover from losses sustained in 2011 - will be a test of the shipping lines’ resolve to restore rates to more sustainable levels.

The announced increases of between US$300 and $800 per teu are the highest quantum proposed by carriers since the abolition of conferences on the European trades in 2008, according to analysts at Alphaliner.

“If successful, they would bring spot rates from the Far East to Europe up from $700 per teu to around $1,000-1,500 per teu,” said the analysts.

“Although rates have rebounded since late December from $500 per teu to $700 per teu currently, they remain below break-even with the average bunker surcharge alone standing at $740 per teu.”

The carriers are expected to face considerable resistance against the announced rate increases.

In the current difficult conditions, the latest round of planned rate increases for 1 March will be put to the test after carriers failed to increase freight rates in eight out of nine attempts since March 2010.

The only successful rate increase was December 2011 when carriers managed to secure a $200 per teu peak season surcharge, driven mainly by the tight space situation due to the seasonal year-end surge in cargo bookings.

Alphaliner said that the increases are expected to bring load factors to below 90% and with no shortage of space and containers in the next few weeks, carriers will face an uphill task to push through with their plans.

In recent weeks IFW has reported that Hong Kong-based Orient Overseas Container Line (OOCL) will hike freight rates by US$200 per container for cargo moving from North Europe to Asia from 15 February, while Danish carrier Maersk Line is raising its rate on the Asia-Europe lane by $775 from 1 March.

Hapag-Lloyd has also announced an increase of $750 per teu from East Asia (excluding Japan) to Europe, targeted for 1 March.

And CMA CGM has announced increases on most trades between February and March, according to shipping industry sources."
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