Increased Freight Rates

The rates for shipping containers have finally been increased for the first time since 2008, by around 1.5%.

According to numerous researchers including Barclays, Merill Lynch, and Clarkson, Alphaliner and Drewry, rates dropped 2.5 percent last year and are continuing to do so. Many shipping lines have succeeded in raising the rates at the beginning of the year, due to an increase in rush orders before the lunar new year occurs.

The managing director of China Shipping Container Lines; Huang Xiaowen, has been quoted to say that “The freight rates seem to have increased rapidly on the European route, but they are now at a level that marginally covers costs”.

Although rates for China Shipping Container Lines are not set to rise any further than another 20%, the rates now only just allow the company to cover their expenditure, further increases will allow the company to make profit without too much expense for the customer.

A survey posted by an unnamed Asian shipping line has found that the supply for cargo space will increase 6.5% this year, as well as an increase for global trade of around 5%. Similar results have also been confirmed by numerous research houses.

The rates on transpacific shipping lines are expected to either plateau or drop in the coming year according to Geoffrey Chang (head of transport at Bocom International). This is due to the reduction in vessel numbers on the waterways, as a large number of smaller vessels are to be replaced with larger capacity ships of around 18,000 TEU.

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