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South Korea's Hanjin Shipping has announced increases in the rates for Asia-Europe trades from April 1, according to shipping industry sources.
Freight rate increases of $400 for a TEU and $800/FEU will be applicable for dry, reefer and special cargo from the India-Pakistan-Bangladesh (IPB) and West Asia to the Mediterranean and North Europe and from Far East and south east Asia to north Europe, Baltic and Scandinavia.
For dry, refrigerated and special cargo shipments from Japan to North Europe, Baltic, Scandinavia and Mediterranean services, the increases will be $700/TEU and $1,400/FEU. The carrier said in a statement: “These rate increases are inevitable to cover the unsustainable level of current freight rates and rocketing fuel prices.” Meanwhile, London's Drewry Shipping Consultants says shipping lines have been largely successful in making enormous freight rate increases - averaging 114 per cent - stick between Asia and Europe despite overcapacity in the market.
Drewry's World Container Index's subcomponent for freight rates on Shanghai to Rotterdam trade jumped to $2,732/FEU from $1,276 a week earlier.
Attributing it to paring of some excess capacity (for example, Maersk, the world's biggest container operator, has cut about nine per cent capacity on its key Asia-Europe route), Drewry, however, has sounded a note of warning. There will be a reduction of spot rates next week, but container shipping lines, it is felt, will have to withdraw enough capacity from the Asia-Europe trade to support some net rate increases over a fair period of time.
The Drewry Director, Mr Philip Damas, has been quoted as saying, “We will need to see whether these rate increases will stay or erode over time.”
Such an observation is not surprising. According to forecast by the Paris-based consultant, Alphaliner, Europe to Far East container traffic growth would slow to 1.5 per cent in 2012 from an estimated 2.8 per cent in 2011, due to a weakening economic outlook in Europe.
The industry container vessel fleet, by contrast, is set to grow by 8.3 per cent in 2012, thanks to the new deliveries due during the year.
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