A key Asia-Europe freight index has soared 88 percent in the past week, boosting carriers’ hopes steep rate hikes introduced Thursday will stick even as cargo growth slows on the world’s biggest trade lane.
The rate to ship a 40-foot container from Shanghai to Rotterdam rose to $2,732 Thursday from $1,456 on Feb. 23, according to the World Container Index.
All major carriers have increased westbound rates by $700 to $800 per 20-foot container on the westbound leg and are some have followed market leader Maersk Line’s decision to apply a second increase of $400/TEU on April 1.
Analysts say carriers success in making the higher rates stick depends on their ability to maintain discipline over capacity in the next few months. While carriers have removed around 14 percent of capacity since last June, they are likely to restore much of the withdrawn capacity by the summer.
The decision by Maersk, the world’s largest container carrier, to pull capacity from the Asia-Europe trade was an important factor in this week’s large rate increase.
However, other lines, either individually or through vessel-sharing arrangements, must also withhold capacity if the rate increases in the Asia-Europe trade lane are going to stick.
Meantime, carriers represented by the Transpacific Stabilization Agreement last month announced their intention to implement a GRI of $300 per-FEU effective March 15. The March increase would be followed by another GRI around May 1 when many of the new 2010-13 contracts in the trans-Pacific will take effect.