Sunday, February 5, 2023
HomeContainersShipping lines eye further increases in mid-December


To our FREE newsletter
Get all the latest maritime news delivered straight to your inbox.

Shipping lines eye further increases in mid-December

All-inclusive trans-Pacific container shipping rates to North America held steady in the week to Dec. 10 with the expectation that shipping lines would push for further increases next week as demand strengthens.

With restocking for the year-end shopping season out of the picture and China’s Lunar New Year break in February coming into view, North American and European importers are actively soliciting quotes for sailings from Asia in January.

But shippers are getting squeezed by a shortage of empty containers in Asia as port congestion and blank sailings impede the return of equipment from Europe and North America. Shipping lines that can offer sufficient equipment can also demand more in premium service fees.

“More ships are leaving the West Coast of North America without waiting to load up on empty containers, such is the rush to get back to Asia after all the other delays,” a US freight forwarder said. “That just leaves a bigger pile of equipment to slow everything else down.”

Making matters worse, China has ramped up its quarantine requirements for returning crew to seven weeks, further delaying ships that have needed to add port calls elsewhere for a quicker crew change. The flow of cargoes to ports in South China by feeder vessels have been particularly hard hit by these escalated restrictions.

Premium rates from North Asia could increase from $12,000-$14,000/FEU to the West Coast of North America and $16,000-$18,000/FEU to the East Coast as soon as next week as shipowners push for General Rate Increases of as much as $3,000/FEU on Freight-All-Kinds base rates from Dec. 15.

But some sources doubted such a sharp increase would be accepted.

“Demand may pick up due to increased sailings before Chinese New Year, but rates will increase only marginally, if at all,” a source based in Singapore said.

Carriers are now aiming for stability in spot rates and many have shied away from offering long-term deals to freight forwarders in order to control the volatility in spot rates, the source added.

Demand wanes from Southeast Asia exporters

Premium rates remained steady on the Southeast Asia-North America route as port congestion and delays offset the bearish sentiment due to tepid demand.

Rates ranged between $16,000/FEU and $19,000/FEU for Southeast Asia to East Coast North America and $13,000-$16,000/FEU for the West Coast.

Sources say there is no rush among shippers to make bookings as most of the Christmas demand has been met and it’s too late to place new bookings.

“There have been substantial drops in the rates since Golden Week,” a logistics provider based in India said. “Don’t know why indices aren’t highlighting it enough. Only the exporters with high value goods are booking shipments at a higher rate and most of the small- and medium-scale shippers are just waiting for prices to come down.”

Shippers have become familiar with cargo delays and equipment shortages and are better at planning their bookings to avoid a tight deadline, the logistics provider added. But congestion issues and blank sailings from US ports remain a concern with a backhaul cancellation rate of nearly 10%.

Premiums expected for some prompt shipments to Europe

FAK rates from Asia to Europe fell this week as the spot market hit a pocket of weak demand between periods of restocking for year-end holidays and the Lunar New Year. Platts Container Rate 1 – North Asia to UK-Continent – fell to $14,500/FEU on Dec. 10 from $15,750/FEU on Dec. 3.

But some shipowners are adding premium service fees for prompt loading dates of $3,000-$5,000/FEU as they anticipate a sharp rebound in demand over the next month to coincide with intensifying supply chain issues.

“Premium rates to the UK in particular can be as high as $20,000/FEU for prompt loading,” a UK-based freight forwarder said. “We see demand recovering quite nicely as we move into the first quarter.”

Source: Platts

Related Posts


Finance & Economy
Shipping News

Keppel Corp posts 9% drop in full-year profit

Singapore’s Keppel Corp said on Thursday its net profit for the year fell 9%, partly hurt by weak performance from its urban development business...

Stolt-Nielsen sees Q4 profits rise on strong markets

Stolt-Nielsen Limited reported unaudited results for the fourth quarter and full year 2022. The Company reported a fourth-quarter net profit of $95.3 million, with revenue...

Euronav delivers better-than-expected Q4 revenue

Euronav NV reported its non-audited financial results for the fourth quarter ended 31 December 2022. Hugo De Stoop, CEO of Euronav said: “Constrained vessel supply...

Wartsila: A challenging year with strong annual growth

HIGHLIGHTS FROM OCTOBER–DECEMBER 2022 Order intake decreased by 24% to EUR 1,638 million (2,150)Service order intake increased by 6% to EUR 791 million (747)Net sales...

Hapag-Lloyd achieves extraordinarily strong result in its anniversary year 2022

On the basis of preliminary and unaudited figures, Hapag-Lloyd has concluded the 2022 financial year – in which it celebrated its 175th anniversary –...

Baltic index hits over 2-year trough on waning demand for larger vessels

The Baltic Exchange’s dry bulk sea freight index dropped to its lowest level in...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury...

Baltic index falls to over 2-year low as larger vessel rates slide

The Baltic Exchange’s dry bulk sea freight index fell to its lowest since June...

Baltic index logs worst month in 3 years

The Baltic Exchange’s main sea freight index registered its biggest monthly percentage fall in...

Baltic index snaps 9-day losing streak as panamax, supramax rates rise

The Baltic Exchange’s main sea freight index snapped its nine-session losing streak on Tuesday,...

DP World wins bid for development of a mega-container terminal at India’s Deendayal Port

DP World has won a major concession to develop, operate and maintain the mega-container terminal at Deendayal port in Gujarat, on the western coast...

Luxury Cruise Market Holds Much Promise For Greek & East Med Hidden Gem Destinations

The appeal of Greece and the East Mediterranean as an ideal region for luxury cruising will be one of the main highlights of the...

Port of Los Angeles proposes cruise terminal project

The Port of Los Angeles is inviting comments on a draft Request for Proposals (RFP) for the future development of a new Outer Harbor...

Port of Long Beach Closes 2022 with Second-Busiest Year

The Port of Long Beach marked its second-busiest year on record by moving 9.13 million twenty-foot equivalent units in 2022, allowing for a return...

Hapag-Lloyd AG acquires share in J M Baxi Ports & Logistics Limited

Hapag-Lloyd AG signed a binding agreement today under which it will acquire 35% of J M Baxi Ports & Logistics Limited (JMBPL) from a...