CMA CGM is championing the rate restoration fight back on the Asia-Europe tradelane with another huge GRI (general rate increase) planned for 1 January.
The French carrier says its Asia to North Europe/west Mediterranean FAK (freight all kinds) rates will increase to $3,000 per 40ft
Alongside its liner peers, CMA CGM increased its Asia-North Europe 40ft rate to $1,800 on 1 December, and then to $2,000 from 15 December, although the effect so far on the spot market has been muted.
While container spot rates are starting to see an upward momentum this week, with, for example, Xeneta’s XSI Asia-North Europe component reflecting a 15% increase, for an average of $1,431 per 40ft, carriers are still offering cheaper rates on their spot platforms. or via NVOCCs.
Indeed, just today we received an unsolicited offer from a Shenzhen-based forwarder touting a rate of $1,000 for a 40ft from Shenzhen, Ningbo, Shanghai or Qingdao to Hamburg, Rotterdam or Antwerp, valid for shipment through to 14 December.
Nevertheless, it is reported that shipper contacts this week suggest carriers are refusing to honour some short-term deals via online booking platforms, with responses such as “fully booked” or “not available” appearing when shippers try to book online.
It seems that Asia-Europe carriers are deploying tried and trusted ‘shock and awe’ tactics of proposing eye-watering FAK rate hikes in order to get an acceptable quantum to stick.
And it is perhaps no coincidence that the shipping lines are trying to disrupt the spot markets ahead of new Asia-Europe contract negotiations; the idea being to instil trepidation in the minds of shippers that will encourage them to sign new deals at a significant premium to the volatile spot indices.
However some contract deals are apparently already being negotiated on a par with spot, according to Singapore-based AGX, a collaboration platform for forwarders and importers.
“Annual deals are still in the doldrums, due the extreme capacity influx next year,” said AGX, adding that the first carrier offers for Asia-Europe were in the “three digits” ballpark.
But some carrier negotiators have been told to “walk away” from low-rated deals, according to a carrier source.
“We have been instructed not to close deals below a certain level, and at the next level only to agree to a maximum three-month duration,” the source said.
Meanwhile, the transpacific is also very much on the rate restoration radar of carriers.
For example, MSC this week announced new FAK rates from Asia to the US from 15 December, valid until new year’s eve, of $1,800 per 40ft for US west coast ports and $3,000 per 40ft for the east coast, with an additional $400 for Gulf coast ports.
By comparison, Xeneta’s average spot reading for the US west coast was down 3% this week, to $1,652 per 40ft.
