The contagion of skyrocketing container freight rates has now spread from the Asia-Europe trade lane, to the transpacific, and is also about to hit transatlantic shippers, says an article published on loadstar website.
Summary
- Container freight rates are witnessing a dramatic surge, affecting major trade lanes including Asia-Europe, transpacific, and soon the transatlantic routes.
- The spot rates from North Europe to the US east coast have notably decreased compared to the previous year, but a significant increase is anticipated.
- Ocean carriers must provide a 30-day notice before imposing surcharges or general rate increases (GRIs), but this requirement has been waived for shipments from Asia to the US rerouted due to the Red Sea crisis.
- Maersk and CMA CGM have announced new surcharges and rate restorations, which are likely to cause a sharp increase in container spot rates.
- Carriers on the Asia-Europe route have implemented multiple surcharges for cargo in transit due to declared force majeure on bill of lading contracts.
- New Freight All Kinds (FAK) rates have been announced, with CMA CGM charging $6,000 for a 40ft container from Asia to North Europe from 15 January.
Widespread Increase in Container Freight Rates
The shipping industry is witnessing a dramatic surge in container freight rates, affecting major trade lanes including Asia-Europe, transpacific, and soon the transatlantic routes. This escalation in rates is significantly impacting shippers worldwide.
Current Rate Situation
The spot rates from North Europe to the US east coast have notably decreased compared to the previous year, dropping from an average of $6,412 per 40ft container to just $1,464. This decline is stark compared to the $2,000-plus rates before the pandemic. However, a dramatic increase is anticipated.
Regulatory Framework And Surcharges
Under the US Shipping Act, ocean carriers must provide a 30-day notice before imposing surcharges or general rate increases (GRIs). However, this requirement has been waived for shipments from Asia to the US rerouted due to the Red Sea crisis. For transatlantic shipments, carriers must adhere to this notice period, but significant charges are expected.
Maersk And CMA CGM’s Announcements
Maersk has announced a peak season surcharge (PSS) of $750 per 40ft from North Europe to the US and Canada, effective from 5 February, citing disruptions in global networks. Similarly, CMA CGM has initiated a rate restoration of $1,000 per 40ft from European ports to the US, Canada, and Mexico starting 21 January.
Impact On Spot Rates
These surcharges, along with planned GRIs, are likely to cause a sharp increase in container spot rates, especially on transatlantic routes where demand remains weak.
Asia-Europe Trade Lane Surcharges
Carriers on the Asia-Europe route have implemented multiple surcharges for cargo in transit due to declared force majeure on bill of lading contracts. These include transit disruption and emergency contingency surcharges, which consignees must pay before container release at destination ports.
Additionally, new Freight All Kinds (FAK) rates have been announced, with CMA CGM charging $6,000 for a 40ft container from Asia to North Europe from 15 January.
Significant Rate Increases
The Drewry’s World Container Index (WCI) shows substantial increases in spot rates for Asia-North Europe and Mediterranean ports, indicating a significant upward trend in the market.
Transpacific Trade Lane Impact
The contagion of rising freight rates has also hit the Asia-US trades. The WCI Asia-west coast rate is up by 30%, averaging at $2,726 per 40ft, a 39% increase from the previous year. East coast rates have seen a 26% rise to $3,858 per 40ft. These rates are expected to spike further due to Panama Canal draught restrictions and Suez Canal diversions, affecting the all-water Asia-US east coast services.
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Source: loadstar
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