Space issues force rates updwards
January 6, 2012
Shippers are struggling to find space on containerships heading from Asia to the US and Europe, with cargo being left on the quayside and lines newly able to jack up their prices.
According to a report in IFW’s sister publication, Lloyd’s List, ocean carriers have managed to lift freight rates on the eastbound transpacific trades, reversing a slide that started in mid-2011 as a weak peak season fizzled out.
Spot headhaul transpacific rates rallied 27.6% in the past week, according to Drewry’s Hong Kong-Los Angeles container rate benchmark.
The upturn began after action by Transpacific Stabilisation Agreement (TSA) members and removal of capacity for routine maintenance over Christmas. Similar conditions in the Asia-Europe trades has abruptly shifted the supply-demand balance.
Nearly all lines are now rolling cargo, according to analyst Drewry’s Philip Damas, a situation not seen since mid-2010. The squeeze on capacity reflects a mini-surge in shipments out of Asia ahead of factory closures during the Chinese new year holidays, when, traditionally, fewer ships are deployed.
TSA lines announced plans in November to individually raise all-in freight rates and charges by a minimum $400 per feu from1 January, as an interim step before publishing annual service contracting guidelines.
However, despite the latest increases, prices remain lower than they were a year ago. Current spot rates quoted by Drewry are almost 14% below those of 12 months ago.
Courtesy of IFW
