Container Shipping Rates To Europe Firm Up

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Rates on the India to Europe shipments have risen to about $500 for a 20ft container and $900 for a 40ft one, and may go up further. A (A file photo of Jawaharlal Nehru Port, Mumbai. Rates on the India to Europe shipments have risen to about $500 for a 20ft container and $900 for a 40ft one, and may go up further.)

Bangalore: The cost of shipping cargo containers from India to Europe has firmed up after major carriers raised rates from 1 July.

Survival at stake

Rates on the India to Europe shipments have risen to about $500 for a 20ft container and $900 for a 40ft one, and may go up further.

Emboldened by the success of the July rate increases, shipping firms have reintroduced from 1 August the bunker adjustment factor (BAF), a surcharge on ship fuel, also known as bunker, which they had stopped collecting earlier this year when the Asia to Europe trade went into a freefall.

Copenhagen-based Maersk Line, the world’s biggest container shipping firm, has announced it would raise rates by $150 for a 20ft container and by $300 for a 40ft container to Europe.

Many other carriers are expected to follow Maersk and Mediterranean Shipping by raising rates on the India-Europe sector.

“Our survival was at stake because the rates had reached rock-bottom levels. We had to do something drastic to prevent us from going under,” said an executive at Hapag-Lloyd, the world’s fifth biggest container shipping firm. He declined to be named because of company policy on speaking with the media.seventhMAds

“There was a degree of desperation among container shipping lines. The rate increase had to happen,” said Jasraj. He added that the effect of a number of container ships being laid up globally for lack of cargo and withdrawal of services has made an impact on freight rates.

The number of idle container ships has increased in the past two weeks to 10% of the world fleet as more vessels were removed from active service. A total of 520 ships are currently idle, representing 1.28 million standard containers, according to Paris-based container industry database AXS-Alphaliner.

Meanwhile, some container carriers are raising rates to the US, where the costs are currently hovering at $1,300-1,400 for transporting a 20ft container. Beginning 10 August, French firm CMA CGM, the world’s third biggest container shipping carrier, and Hapag-Lloyd have announced a rate increase of $400 for a 20ft container and $500 for a 40ft container to the US.

On Thursday, Maersk Line announced it was raising rates by $250 for shipping a 20ft container from India to West Africa, beginning 1 September.

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Source: Livemint