Hanjin Shipping joins other major ocean carriers in pushing bold rate increases on the depressed Asia-Europe trade lanes, announcing a $700 price hike that would boost the rate more than double the current spot market price.
On March 1, Hanjin will raise its rates on the trade between Asia, excluding Japan, and North Europe and the Mediterranean by $700 per 20-foot container unit and $1,400 for 40-foot equivalent unit, including dry containers, reefers and special containers. In the last few weeks, other carriers, including Maersk Line, OOCL, Hapag-Lloyd, Zim and Mediterranean Shipping, have announced similar increases on the Asia-Europe trade lanes.
The general rate increases on the depressed Asia-Europe trade come as container lines report deep 2011 losses caused by weak demand and low rates. The Shanghai Containerized Freight Index for the Asia-Europe trade fell below $500 in late 2011 and since has grown to around $730 per TEU. That is still barely half the rate at this time last year.
On the same date Hanjin’s rates on the trades between the Indian subcontinent and North Europe and the Mediterranean will increase by $300 per TEU and $600 per FEU.
On the routes between Asia and West Africa, rates will go up by $200 per TEU and $400 per FEU. Hanjin will increase rates from Japan to North Europe and the Mediterranean by $700 per TEU and $1,400 per FEU, starting April 1.
Hanjin said the two-phase “rate restoration plan” is needed because “as shown in our latest business performances, current rates cannot cover basic operating costs let alone fuel prices.” Hanjin posted a loss of $487 million on its container business last year.