The world’s largest container shipping company, Maersk Line, plans to raise spot freight rates sharply on main routes from ports in Asia to ports in northern Europe, with effect from Sep 1, the company said.
Spot rates for twenty foot equivalent unit containers (TEU) will rise by $1,000, Maersk Line wrote in a letter to customers last week.
The planned price hike corresponds to a 156 percent increase from current levels if implemented successfully. Container rates typically rise in big jumps announced by the shipping companies before gradually easing back over time.
According to the Shanghai Containerized Freight Index, twenty foot rates from Asia to Europe stood at $640 last week, which is widely seen as a loss-making level.
The announcement from Maersk Line, a unit in Danish conglomerate A.P. Moller-Maersk followed similar plans from other major container shipping companies like Switzerland-based world number two Mediterranean Shipping Company and the third biggest player, French CMA CGM, which have announced rate hikes of $1,000 and $950 respectively.
Taiwanese Evergreen, Hong Kong-based Orient Overseas Container Line and Japanese K Line have also said they intend to lift freight rates by $1,000.
A toxic mix of overcapacity, weak demand and aggressive pricing is depressing profits in the container shipping industry. Growth was once easily outpacing economic expansion but those heady days are things of the past, Maersk Line Chief Executive Soren Skou told Reuters on Friday.
Copyright Ships & Ports Ltd. Permission to use quotations from this article is granted subject to appropriate credit given to www.shipsandports.com.ng as the source.