Container shipping lines have been able to raise Asia-Europe freight rates enough to return them to profitability on the route, according to the latest Bimco Shipping Market Overview.
“The unprecedentedly high rate increases of $700 per TEU that were scheduled to be implemented on March 1 actually came through to the full extent,” Bimco said. This lifted rates almost 100 percent over a two-week period.
Rates have slid slowly since then, but are largely holding onto levels that are nearly double year-earlier prices. Bimco said carriers were able to obtain rate increases at the end of what is normally the weakest quarter because of their “extremely firm determination with no room for negotiations, aggressive capacity cuts executed since mid-2011 and the fact that all liner companies on the route were seeking the same goal — that of higher freight rates.”
Bimco said the key to the successful implementation of rate increases was the reduction of deployed capacity on routes from the Far East to Europe and the Mediterranean that started in mid-2011, as well as the backing of the rate increase by larger freight forwarders.
It said carriers’ focus for the second quarter will be on limiting the expected weekly decreases in rates, bringing the market closer to the traditional peak season in the third quarter.