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Following last year’s price war to compete for market share, container shipping companies are struggling to restore the freight rates.
According to the 2011 operating results released by the shipping companies, following the high profits in 2010, shipping profits plunged in deep deficit. Therefore, in order to reverse the steep decline in price, all the shipping companies have introduced plans to restore the freight rates.
In their view, the Asia-Europe line is crucial, but a wide gap between the price increases in various differences.
Evergreen plans to implement a $ 600 / TEU freight rise on March 1 and on April 1 it will once again raise $ 300 / TEUs in freight fare.
CMA CGM plans to increase $ 200 / TEU freight fate to Asia to Northern Europe, Mediterranean, Black Sea, and North Africa route in March 1, while the temporary fuel surcharge will be raised to $ 550 / TEU.
The CGM said in an announcement of a detailed account of freight recovery plan, that the all-in freight fare, including fuel costs, currency adjustment factors and the Suez Canal surcharges, has made the shipping companies unable to pay these high costs.
In addition, due to inclement weather and some Asian port congestion caused by flight delays, westbound ships have to speed up in order to get the European berthing spacesand the escort in the Suez Canal, therefore offsetting all the profits produced on the eastbound line.
After the CGM released the price-rise statement to the shipper on the other a few routes, it has made an announcement that: “The current level of tariffs is unable to meet the high cost of the ships in port, the Suez Canal as well as in fuel.”
Maersk Line, which has compete aggressively for market share last year and was criticized by fellow shipping companies for this, has notified the customer that on March 1it will improve the freight prices for dry and frozen food to in Asia to the Mediterranean and Northern Europe by March 1 with an increase of $ 775 / TEU .
Hapag-Lloyd shipping has also set up a high price target. A few days ago, the company declared a plan to the shipper to increase the tariffs on most of the Asia-Europe routesto $ 750 / TEU on March 1st.
On the other hand, COSCO is brewing the overall price of a “two-step" plan. The company hopes that by March 1, the tariffs would increase by $ 300 / TEU and again on April 1, $ 300 / TEU .
In contrast, Hong Kong's Orient Overseas is more cautious. The company announced thatsince February 15, there will be an overall increase of $ 200 for each container, but this year there will be further price adjustments .
In 2011 container shipping industry suffered heavy losses, the Asia-Europe line’s spot prices fell from $ 1,400 / TEU to $ 400 / TEU, and did not recover until in the final weeks of last year to about $ 700. At present, the prospect of some of the routes are showing cautious optimism.
On the supply side, due to the cooperation between the CGM andMediterranean Shipping Company, some Maersk and CMA CGM in Asia – Northern European joint routewill be cancelled, which means that more capacity on that route would be cancelled. Other shipping companies in the off-season will undo some of the routes, too.
According to the estimation of Containerization International, from last November to thisJanuary,Asia - about 8% of the capacity of the Asia - Northern Europe route would becut back on. And on the other hand, very large vessel is now shifted to Asia – Mediterranean routes and Asia - Middle East routes.
China Shipping, the United Arab shipping companies and CGM will open up a new Asia - Middle East route, which will be equipped with seven container ships with capacity ranging from 12,500 TEUs -14, 400TEU. This new route will be started on Friday, and replace the existing two routes.
CGM pointed out that it is the first time that the ships of this size have been put intouse in the route besides the Asia-Europe line, which opens up new prospects for the use of such ship. “CMA CGM said.
In the meantime, with a stable spot price, shipping companies have begun to prepare for the negotiations over the annual contract of Pan-Pacific route. And according to DREWRY’s latest benchmark price on the latest Hong Kong - Los Angeles route are unchanged for five weeks in a row, to maintain at 1,832 / FEU. This level decreased by 12% over the same period last year , but compare with the period at the end of 2011 when freight rates plummeted nearly $ 1,400, this is a great improvement .