Rate Hikes Fail to Ease Pressure on Asia-Europe Carriers The trade publication, “Alphaliner,” reports that previously signed contracts offset this month’s increases. They further report that recent sharp increases in spot freight rates have done little to alleviate pressure on ocean carrier margins in the Asia-Europe trade. Two successful increases have boosted freight rates since December, lifting operating margins above break-even on the spot market. But overall margins remain under pressure because contract rates for six- to 12-month periods were agreed at much lower levels than current spot rates, “Alphaliner” noted. Although spot freight rates account for a large part of carriers’ total revenues on the Asia-Europe trade, contract volumes are estimated to account for 25 percent of the market. Meanwhile, increased capacity in the next three months could threaten the recovery in rates amid weak European demand for Asian imports, the container market analyst said. Carriers lost an estimated $550 on each 20-foot container shipped from Asia to North Europe in December, exceeding the negative operating margins in the 2009 slump on a per-unit basis. The break-even rate for a container ship capable of carrying 8,000 20-foot equivalent units on the westbound route from Asia is estimated to have risen from $800 per TEU in early 2009 to $1,100 now due to the sharp rise in bunker costs. The breakeven rates for larger vessels are about $100- to $200-per-TEU lower, according to “Alphaliner. “ Maersk Line CEO SorenSkou last week said the carrier’s $775-per-TEU general rate increase that took effect on March 1, “is holding up quite nicely … but not getting us into profit.” It’s too early to predict the prospects for another increase, of $400 per TEU, planned for April 1, “but we expect that the market will have opportunities to increase rates.” Bruce Barnard, Special Correspondent
Posted on: Wed, 12 Jun 2013 12:54:47 +0000
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