Far East rates set to rise $300 a TEU

ALAN PEAT IT SEEMS that shippers will be hit with a pretty massive hike in seafreight rates on the SA-Far East trade on June 1, with what some members of the shipping line market have indicated is a US$300 per TEU general rates increase (GRI) – or general rates restoration (GRR) as the lines term it. The indications are that this trade is certainly a supplier’s market – with seafreight capacity apparently stretched to the limits, particularly on the incoming leg. “Our ships are bursting at the seams,” said a line agent, with an estimate that market demand, for example, was up by 15% in the volume of imports for April compared to March. It’s a case of the demand now well exceeding the supply of capacity, and shipping lines that FTW has talked to recently are all thrilled that it’s no longer the poor rates that have existed for the last couple of decades. “At long last,” said one, “we don’t have to go out begging for a rate which helps us make a small profit. We’re now in a position where we can look for a sensible rate – one which covers our investments in capital equipment, operating cost, and still makes us a decent profit.” In the short time before our deadline we’ve only been able to confirm that MOL and Evergreen intend to hike the rates by US$300 – although other unconfirmed reports to FTW indicate that it’s a pretty universal move. A spokesman for Maersk told FTW that the official announcement had not yet been made, but hinted that it was a fairly attractive possibility. Similarly, a spokesman for Safmarine confirmed the same position.