New price hikes on eastbound transatlantic

Forwarders offering services on the eastbound transatlantic are facing “serious price hikes”, as ocean carriers capitalise on the tight capacity situation. 

Since the start of the year, Evergreen, OOCL, Hanjin and Zim have all announced price increases on the North America to Europe trade, with Hanjin’s increases reaching US$1,200 per 40ft container. 

Susanne Oud, Bellville Rodair International’s operations director for Europe, said carriers had already managed to increase rates on the route by a third this year on last year, with base rates, including bunker charges, of around $2,000 per teu now being charged. 

She said this was down to carriers removing capacity last year to meet lower demand and volumes starting to recover towards the end of the year. 

Oud added that carriers’ customer service levels had also declined and carriers were increasingly slot-chartering on each other’s services. 

“Last year, rates were steady [on North America to Europe], nothing like the Asia-Europe fiasco, but as things have slowly started to pick up, the carriers have been very cautious about putting the capacity back in,” she said. 

“They are trying to implement some serious price hikes, with general rate increases of $800 to $1,000, and Zim has announced an emergency revenue charge – claiming problems with equipment and space. 

“Clients that are willing to pay the increase will get their cargo shipped, but for others it’s going to be a big problem. 

“They are already selling their products cheaper because of the recession, so they have already had to reduce their margins. 

“A lot of companies are bidding for contracts at one rate level, then, when the contract actually comes up, the rates have doubled and any margins they have are completely out of the window.”
Oud urged carriers to hold discussions with the market, rather than just suddenly and drastically increasing rates when capacity tightened. 

The latest figures released by the European Liner Affairs Association (ELAA) reveal that eastbound volumes on the transatlantic trade increased year-on-year by 17% in December, the only year-on-year increase experienced on the trade during 2009. 

Meanwhile, Sunny Ho, executive director of the Hong Kong Shippers’ Council told IFW’s sister publication CI-eXpress that he expected rates on the transpacific trade to fall in line with declining volumes, following a surge in demand in the run-up to the Chinese new year.

He said: “It is now really quiet, with no demand at all; the impact of the Chinese new year has been even more substantial than usual.’

“Shipping lines take advantage of the push before Chinese new year, but then there is a quiet period. Factories do not re-open until the end of February/early March, and their orders are usually low after the new year.”