AS space availability begins to tighten with the start of the peak season, Asia-North Europe ocean carriers are looking to increase container shipping rates by up to US$500 per TEU July 1.
Carriers appear to be adopting a 'shock and awe' tactic of a substantial FAK increase rather than gradual smaller rises, knowing they may not get a better opportunity before demand weakens again as the peak season fizzles out, reports The Loadstar of UK.
One carrier source said it had decided to 'make a statement' with a significant increase. 'We know we will not get the full amount, but even if we had asked for $200 we wouldn't get that either, so we have nothing to lose and more to gain,' he argued.
The FAK announcements come as container spot rates continued to soften across all major trades last week. The Shanghai Containerised Freight Index (SCFI) fell 3.4 per cent last week to 751, more than 9 per cent down on a year ago.
The container lines had been obliged to cancel planned June 15 GRIs due to a dip in vessel utilisation levels, and lasts week saw the first reaction from the carriers: MSC announced it was to terminate its New Eagle service, jointly operated with 2M partner Maersk Line (TP1) early next month.
MSC said it was 'as a result of the challenging operating environment for business on the transpacific trade.'
It offered a 'contingency plan' for the transfer of forward bookings onto other loops, which it said, it hoped would give 'limited disruption' to shippers.
And, in addition to the current demand-supply imbalance, transpacific carriers face further problems from the fallout of the escalating trade war between the US and China. Alphaliner estimated this week that the punitive tariffs being imposed by both nations could wipe out around 7 per cent of transpacific volumes from next month.
Carriers appear to be adopting a 'shock and awe' tactic of a substantial FAK increase rather than gradual smaller rises, knowing they may not get a better opportunity before demand weakens again as the peak season fizzles out, reports The Loadstar of UK.
One carrier source said it had decided to 'make a statement' with a significant increase. 'We know we will not get the full amount, but even if we had asked for $200 we wouldn't get that either, so we have nothing to lose and more to gain,' he argued.
The FAK announcements come as container spot rates continued to soften across all major trades last week. The Shanghai Containerised Freight Index (SCFI) fell 3.4 per cent last week to 751, more than 9 per cent down on a year ago.
The container lines had been obliged to cancel planned June 15 GRIs due to a dip in vessel utilisation levels, and lasts week saw the first reaction from the carriers: MSC announced it was to terminate its New Eagle service, jointly operated with 2M partner Maersk Line (TP1) early next month.
MSC said it was 'as a result of the challenging operating environment for business on the transpacific trade.'
It offered a 'contingency plan' for the transfer of forward bookings onto other loops, which it said, it hoped would give 'limited disruption' to shippers.
And, in addition to the current demand-supply imbalance, transpacific carriers face further problems from the fallout of the escalating trade war between the US and China. Alphaliner estimated this week that the punitive tariffs being imposed by both nations could wipe out around 7 per cent of transpacific volumes from next month.