LARS JENSEN: Corona impact – here comes the rate increases

By Lars Jensen from SeaIntelligence

Container demand
0

The impact on container shipping keeps worsening. According to the latest SeaIntelligence Sunday Spotlight the carriers have now blanked a total of 47 sailings to Europe and US split with 25 to the US and 22 to Europe. This is up from 31 such Corona-related blank sailings just a week ago. And it is on top of the already blanked sailings from Chinese New Year.

The ripple effects are materializing. Multiple carriers are introducing 1000+USD surcharges on reefer imports to China due to no availability of reefer plugs, as the cargo in Chinese ports is not being picked up. They may even invoke the clause in the Bill of Lading allowing them to discharge the cargo at an entirely different port, yet the shipper is still obliged to pay full freight as well as any additional costs.

As predicted a week ago, there will be clear ripple effects from the raft of additional blank sailings as this will inevitably curb the backhaul capacity down the line – not to mention the impact from disruption in the carriers’ ability to effectively manage their empty repositioning. This ripple effect is now getting real. Hapag Lloyd has announced a 325 USD surcharge per container from North Europe to Far East. The latest spot rate measured from WCI on this trade is 626 USD/FFE, and hence the announced increase is indeed very substantial in relative terms. Additional announced increases from Mediterranean to Far East are even higher.

CMA CGM has announced a 2000 USD surcharge for reefers from US and Canada to Asia starting from March 13th. Additionally they have announced new reefer FAK rates from North Europe to Asia from March 1st in the range of 4700-5700 USD – as compared to their most recent reefer FAK rate announcement in place from January 1st which was at 2900 USD.

And now it is time to also consider “round 2” of the ripple effects. Assuming the virus outbreak gets under control, Chinese factories resume full production in March-April, and may even run at higher output initially to make up for lost production. This will happen at the same time as the amount of vessels returning to Asia with empty boxes is at a very low level due to the current blank sailings potentially triggering equipment shortages (and associated rate hikes) for Asian exports.

Source LARS JENSEN/LinkedIN

Deja un comentario aquí:

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Smiley face

¡RECIBA NUESTRO BOLETÍN SEMANAL A SU CORREO! 
¡Suscribase Ahora!
Cerrar

Smiley face

GET OUR WEEKLY NEWSLETTER TO YOUR INBOX!
Subscribe Now!
Close