Shippers are accusing Asia-North Europe ocean carriers of ‘price gouging’ as FAK (freight all kinds) rates being quoted for January shipment go through the roof.
“We expected our rates to be increased next year, but not to this level, and apparently they are non-negotiable,” said one UK-based NVOCC.
“This has cemented their $3,000 January GRIs, and more,” said a forwarder contact.
Red Sea crisis
The $3,000 per 40ft FAK rates proposed by Asia-North Europe carriers fore 1 January were already having a quantum of success prior to the Red Sea crisis, due to aggressive blanking programmes and, in some cases, the temporary suspension of services.
However, with a capacity crunch looming prior to Chinese New Year on 10 February – a consequence of loaders returning to Asia considerably off-schedule because of the longer sea route via the Cape of Good Hope – space will be at a premium.
PSSs
And carriers have sent out numerous advisories in the past few days announcing a raft of new peak season surcharges (PSSs) effective 1 January, which they will add to the new FAK or contract rates.
The talk is of rates of $10,000 per 40ft being quoted for January shipment from China to the UK. Peter Sand, chief analyst at freight rate benchmarking firm Xeneta, said that although that was not the market average, it’s what some shippers may have to pay for very urgent shipments.
“The clash with the upcoming season’s demand upswing, ahead of the Chinese New Year, is making the events even more dramatic for all involved,” said Mr Sand.
There is also bad news for European importers anxiously awaiting the arrival of cargo coming via the already re-routed voyages: they will be asked to pay significantly more to obtain release of their boxes, when they are eventually discharged.
Most carriers have invoked force majeure clauses in their bills of lading that effectively excuses them from the contract of carriage and gives them the right to abandon cargo, or, most likely, levy additional freight fees, such as for transit disruption and contingency charges, which must be paid before the release of containers.
Xeneta’s XSI Asia to US west coast component was up 9% this week, to $1,745 per 40ft, which compares with a spot reading of $1,500 per 40ft a year ago.
Nevertheless, the rate contagion is likely to spread to this underperforming route in the coming weeks, fuelled by vessels and equipment being redeployed to more lucrative tradelanes.
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Source : Loadstar
