Maersk Line will hike westbound rates on the Asia-Europe trade lane a further $400 in April, as the world’s largest carrier announced on Friday the second rate increase of the year on the depressed route.
The rate increase, which will apply to dry and refrigerated cargo moving from all Asian ports to all destinations in north Europe and the Mediterranean, will raise the cost of shipping $1,175 from April. The latest increase comes just days before the Danish carrier announced plans to increase westbound rates by $775 per TEU on March 1.
Maersk signaled its determination to push through the higher rates with an announcement on Feb. 17 that it is cutting capacity on the Asia-Europe trade by 9 percent via a vessel sharing agreement with rival French carrier CMA CGM.
All major carriers on the Asia-Europe trade are poised to raise rates by $750 to $800 per TEU on March 1. But it is uncertain whether they will follow Maersk’s latest move, apply smaller increases or stick with the March 1 hikes to boost market share.
Maersk has vowed to maintain its leading market share on the Asia-Europe trade, fuelling skepticism that carriers can implement the latest round of rate hikes, especially as cargo growth is expected to slow to 1.5 percent in 2012 from 2.8 percent in 2011.
Westbound spot rates have risen over the past week, however, following Maersk’s announcement that it will reduce capacity. And shares in Maersk parent A.P. Moller-Maersk were the bigger gainer in the Copenhagen 20 Index today, rising 4.2 percent on the announcement of the April 1 rate hike. Maersk releases its 2011 financial results Monday.
“A week ago I would have said that it would be impossible for Maersk Line to make a profit in 2012. However, if they get [the April rate increase] through, we have a completely different starting point for 2012 and 2013,” Ricky Rasmussen, an analyst at Nykredit Markets, told Danish daily newspaper Berlingske Tidende.
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