Shipping carriers will start next week on Asia to Northern Europe and the Mediterranean routes to implement a series of rate increases, hoping that price increases coupled with ship capacity cuts can make up for potential demand weakness and a steady influx of new shipbuilding into the market.
In order to raise the freight rate on the Asia-Northern Europe route from the current level of about US $750 per TEU, the Mediterranean Shipping Company (Mediterranean Shipping Co.) will increase the various freight rates (FAK) on the route to US $925 per TEU from August 1. Other carriers have also adjusted their prices one after another. Maersk will raise the freight rate from Asia to Rotterdam to US $1025/TEU and US $1900/FEU. COSCO Shipping will raise the freight rate from Shanghai to Rotterdam to US $1050/TEU. Dafei Shipping will raise the freight rate from Asia to Northern Europe to US $1075/TEU and US $1950/TEU.
In terms of Asia-Mediterranean trade, the current average freight rate is about 1400 US dollars/TEU, MSC from August 1. COSCO will also increase the FAK rate from Shanghai to La Spezia, Italy, to $1762/TEU, and will charge $2100/TEU for ships from Asia to the western Mediterranean to $1850/TEU.
Hapg-Lloyd's spokesman said that based on supply and demand fundamentals, while FAK increases attempts to raise interest rates above existing levels are often difficult to succeed, he expects customers to accept the upcoming rate hike, calling the provision of sustainable services "essential".
Capacity Management Insufficient
But this principle does not seem to extend to recover enough capacity to drive interest rate pointers, the lack of adequate capacity management is the Asia-Europe interest rate weakness behind a factor.
Of the total capacity available on Asia to Northern Europe and the Mediterranean routes, 8.7 percent, or 199,051 TEUs, were canceled in July, data from the Sea-Intelligence Maritime Analysis showed. So far, 6.4 per cent (140,710 TEUs) of container ships will be scrapped in August and 2.5 per cent (55391 TEUs) in September.
Maersk said it would cancel an Asia-Northern Europe route "due to the expected reduction in global demand. Last week, Dafei announced four blank voyages for the Asia-Mediterranean route.
while European demand is languishing under the burden of high consumer inflation, Sea-web data shows that more than 7.3 million TEUs have been confirmed, close to 30% of the total active fleet. Drewry estimates that 2.5 million TEUs of capacity will be delivered this year and 3.9 million TEUs by the end of 2024. Alphaliner said that between now and the end of 2024, CMA CGM alone plans to receive about 500000 TEUs of newbuild capacity.
Hapg-Lloyd (Hapag-Lloyd) expects that this year's global container throughput will increase by 2% and capacity will triple, while next year's 3% capacity growth will be overshadowed by 7% capacity growth.
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