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Home » Carriers May Find It Hard To Make Huge Asia-N Europe Rate Hikes Stick

Carriers May Find It Hard To Make Huge Asia-N Europe Rate Hikes Stick

by Joshua
August 1, 2023
in Coast To Coast

Sizeable GRIs by Asia-North Europe ocean carriers will come into force next week – but there are already signs that only a few will be sustained.

 

Indeed, a straw poll of The Loadstar’s shipper and forwarder contacts reveals the major carriers are only likely to achieve about 50% of their 1 August FAK rate increases. But the same carriers are then offering discounts on the GRIs from the second half of the month.

 

Meanwhile, Xeneta’s container spot rate component for Asia to North Europe slid a further 1.5% this week, for an average of $1,188 per 40ft, while some ‘market’ rates ducked under the $1,000 watershed again.

 

Almost all the major lines followed Maersk’s 3 July GRI advisory of a minimum 40ft FAK rate of $1,900, effective 1 August from Asia to the main North European hubs.

 

However, forwarding contacts doubt they can achieve the full quantum, with some shippers deciding to postpone loading dates, gambling that rates will fall back again.

 

In fact, an unsolicited e-mail quotation to The Loadstar this week, from a Chinese forwarder, that reflected the GRIs, quoted $1,350 per 40ft from the main ports in China to the Le Havre-Hamburg range, valid from 1 to 14 August, with prompt shipment available “via all major lines”.

 

And the email added: “A better price is available for later shipments.”

 

With peak season demand “subdued” on the tradelane, and more than 1.2m teu of newbuild tonnage stemmed for delivery before the end of the year, including several 24,000 teu behemoths which will be deployed on the route, Asia-North Europe carriers will need to be judicious in their capacity management to avoid a further rates collapse.

 

Elsewhere, on the Asia-Mediterranean tradelane, rates were flat this week, with Drewry’s WCI reading holding at $1,893 per 40ft.

 

Similarly to North Europe, Asia-Med carriers are seeking a huge FAK rate hike in August, which however could be nullified by a big increase in capacity on the route, including HMM’s new China-India-Med loop, which commences next month.

 

In contrast to Asia-Europe, the transpacific tradelane is showing further signs of a recovery, with another jump in Asia-to-US spot rates this week. The Freightos Baltic Container Index (FBX) recorded an increase of $161 per 40ft, or 12%, this week for spot movements from Asia to the US west coast, to take the average rate up to $1,526 per 40ft.

 

For the US east coast, the FBX recorded a more modest 3% increase, with the higher west coast increase being mainly attributed to industrial action at Canada’s west coast ports, pushing cargo via US west coast ports.

 

And on the transatlantic, the spot rate erosion continued, with Drewry’s WCI North Europe to US east coast average rate falling 3% on the week, to $1,590 per 40ft, representing a 77% year-on-year decline.

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