CARRIERS are having a hard time making Asia-Europe and transpacific rate increases stick as new capacity floods the market and rivals clamour for market share, reports London's International Freighting Weekly.
Shipping lines have tried surcharges of US$400/FEU, but have pared them back to $200/FEU, that should keep rates where they are, said container derivatives broker Freight Investor Services (FIS).
"With capacity expected to be temporarily withdrawn from both trades during the Chinese New Year factory shutdown, it is unlikely that the strength of the market will actually be seen until normal service resumes in mid-February," said an FIS bulletin.
"It seems as though the difficulties in securing rate increases seen in the Europe trade are now also prevalent in the Pacific trades," it added.
Rates on east-west are predicted to drop seven per cent in 2011, warned London shipping consultant Drewry, and half profitability to $8 billion from last year's $17 billion but could plunge further weakened by overcapacity issues.
Another reason shipping rates have failed could rest with stepping up of market coverage such as MSC competing with rival shipping giant Maersk, added the IFW report.
(Source:www.schednet.com)
