Multiple carriers have planned general rate increases in various trade lanes in May and June, although any gains achieved could be fleeting as overcapacity and sluggish global demand continue.
Shipping lines in their global operations have lost billions of dollars in four of the past five years because of overcapacity fostered by a rash of orders for new, large container ships. Although only four carriers in the world today have ships of 18,000 TEUs or larger either in operation or on order, more container lines may join the mega-ship club in the future as they seek to remain cost-competitive. Some shippers are welcoming larger container ships and carrier alliances as a way to keep carriers competitive and move products faster and cheaper.
The opening of the expanded Panama Canal in early 2016 is also expected to trigger a “massive” surplus of 4,000- to 5,000-TEU container ships, many of which will have to be scrapped regardless of their age, according to Drewry Maritime Research. However, another recent setback in progress on the expansion project could delay it again.
Hapag-Lloyd hopes to increase rates on its westbound trade from the Far East to North Europe and the Mediterranean by $750 per TEU, starting June 9.
In the eastbound direction, Maersk Line has scheduled a general rate increase from the Mediterranean to the Middle East and the Indian subcontinent, effective June 1. The hike will be $150 per 20-foot container and $200 per 40-foot, 40-foot high-cube and 45-foot container.
Maersk plans to boost rates on its trade from the Far East, excluding Japan, to Bahrain, Iraq, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates, Jordan and Yemen by $500 per 20-foot container and $1,000 per 40-foot, 40-foot high-cube and 45-foot container, effective May 15.
Starting May 15, Maersk hopes to raise rates on shipments from the Far East, excluding Japan, to South America’s east coast by $750 per 20-foot and non-operating reefer container and $1,500 per 40-foot, 40-foot high-cube and 45-foot container.
Hapag-Lloyd aims to hike rates on cargo from Canada to Australia and New Zealand by $250 per 20-foot container and $500 per 40-foot container, beginning July 1.
Shipping lines in the Transpacific Stabilization Agreement announced their intention to implement a rate hike of $700 per 40-foot container on beef, pork and poultry shipments in the westbound Pacific, beginning July 1. They also have planned a peak-season surcharge of $400 per 40-foot container, starting June 15, and still intend to move forward with a rate increase of $300 per FEU to the U.S. West Coast and $400 per FEU to all other U.S. destinations, effective May 15.
The Journal of Commerce