MSC Could Postpone $600 GRI, Analyst Says

MSC Could Postpone $600 GRI, Analyst Says

MSC’s announcement this week of a new general rate increase on Asia-Europe trades is designed to protect November rate gains from rapid losses and could end up being postponed until January, according to one analyst.

The $600 per TEU GRI is due to be introduced Dec. 15, and was announced only a week after MSC suspended the $500 per TEU GRI originally scheduled to be introduced next Thursday.

“Some might see this as an act of redemption following their suspension of the November Asia-Med GRI last week, which saw rates plummet 17 percent on the trade lane,” said Cherry Wang, an analyst with the ACM/GFI Group.

Wang said the latest announcement from MSC was in line with previous sequential GRIs this year and was most likely an attempt to prevent an erosion of November gains.

“Many were anticipating GRI announcements for January in time for the pre-Chinese New Year rush, so unless other carriers announce a similar increase for December in the next few days, it’s not unreasonable to expect the MSC GRI to get postponed,” she said.

“With Q1 currently valued at around $1290 in the forward curve however, the big question participants wishing to trade the period should be asking themselves isn’t when the next GRI will come in, but whether they expect to see a further GRI in March or not,” she said.

MSC will introduce a $920 per TEU Bunker Compensation Charge on cargo shipped from Asia to the Mediterranean, the Black Sea, North Europe and North Africa from December 1.

Contact Mike King at michael@borderline.eu.com.