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Calm before the storm: shippers brace for hefty Asia-Europe rate hikes

09/08/2020
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Asia-North Europe shippers are bracing for a wave of FAK rate increases and peak season surcharges this month as carriers look to capitalise on several weeks of fully booked ships.

The North Europe component of today’s Shanghai Containerized Freight Index (SCFI) edged up slightly, by $9 to $910 per teu, in what shippers fear is the ‘calm before the storm’.

“The market remains strong on the Asia-Europe route,” Martin Holst-Mikkelsen, head of ocean freight EMEA at Flexport, told The Loadstar.

“We are seeing services out of China full for the coming two weeks from nearly every port of loading. We are also seeing South-east Asia services facing some space pressure at this point.”

The Loadstar reported yesterday that the 2M partners, Maersk and MSC have upgraded their Griffin/sweeper service to a weekly link, and it is understood that THE Alliance is considering reinstating its suspended FE4 loop after its weekly ‘extra loader’ vessel had been fully booked on each voyage.

However, The Loadstar is still hearing that shippers are struggling to book space. One UK forwarder said he had tried to book seven boxes from China at the carrier’s FAK rates, but had been told the earliest availability was on a vessel sailing on 28 August.

He added: “Maersk, as an example, advised it was purposely setting rates on the Maersk Spot offering at levels over and above $1,800 per 40ft, as it simply doesn’t want or need the freight. And, where possible, in the short-term it is trying to put people off booking when not on a longer-term committed contract.”

Meanwhile, rates to Mediterranean ports also ticked up this week, by $5 per teu to $940 per teu, but rates could come under pressure on the route in the coming weeks, with orders being cancelled due to the impact of the pandemic on the holiday season.

On the transpacific tradelane, spot rates to the US west coast took an understandable breather this week after the 17% surge last week, The SCFI recorded a modest $23 drop per 40ft, to $3,144. However, rates on the route remain at a record level, over $3,000, with no immediate signs of demand softening.

“The rebound in demand that started in June continues to keep rates up,” said Ethan Buchman, CMO, Freightos Group. “Some industry insiders are predicting this year’s version of the peak season will last only through September, and will focus on stay at home goods like furniture, kitchenware and electronics.

“Demand is keeping ships out of China very full, with carriers able to charge premiums to prevent shipments from being rolled, even as capacity is nearly back to normal,” he added.

Source: The Load star
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