Mike Wackett of The Loadstar writes that several container liners are expecting to record a fourth-quarter loss and there’s confidence that the new Asia-North Europe contract rates would close above current spot levels. He continues:
MSC has joined rivals CMA CGM and Hapag-Lloyd in announcing a substantial FAK (freight all kinds) general rate increase (GRI) from Asia to North Europe for 1 December.
It remains to be seen whether MSC’s 2M Alliance partner, Maersk, will throw its weight behind the FAK hikes with its own increase.
The Geneva-headquartered carrier advised customers it would increase FAK rates on the transpacific route to $962 per 20ft and $1,750 per 40ft, which is in line, both in quantum and start date, with the GRIs announced recently by CMA CGM and Hapag-Lloyd.
However, the 1 November GRIs on the route announced by carriers proved short-lived, according to the Ningbo Containerized Freight Index (NCFI) weekly commentary.
“Freight prices have fallen sharply after being briefly pushed up,” it said yesterday, noting that the Asia-Europe market, including the Mediterranean trade, remained “weak” against a background of oversupply. […]
“At those levels, we will not close, because we are not going to close contract rates where we, for sure, lose a lot of money,” he said.
Nevertheless, he expressed confidence that new Asia-North Europe contract rates would close above current spot levels – otherwise, he warned, more capacity could be taken out of the network.
Meanwhile, on the transpacific, although there is still some time before contract negotiations begin in earnest ahead of the traditional 1 May start, carriers will look to push up their FAK rates at every opportunity.
Hapag-Lloyd has also just announced a GRI between Asia and the US and Canada, raising rates by $800 per 20ft and $1,000 per 40ft for containers shipped from 1 December.
Read more here.