Maersk announces huge rate hike between Asia and Northern Europe Ship’s crew

From Mike Wackett (The Loadstar) –

Maersk is attempting to reverse weeks of deep discounting on the Asia-Northern Europe route with a significant increase in FAK rates by the end of the month.

And it warned there could be “increases” on other routes as well as fare structures are reassessed across the network.

The Price Announcement This morning, Maersk’s FAK rates from the main Asian ports to the three northern European hubs of Rotterdam, Felixstowe and Gdansk will be increased to US$1,025 per 20 feet and US$1,900 per 40 feet on July 31.

The airline said this was necessary to “continue to offer you a broad portfolio of high-quality services”, adding that the fares are valid until further notice, “but not beyond December 31”.

Price declines in trading have accelerated, with the average spot price of Xeneta’s Asia-Northern Europe XSI component losing another 1.3% to $1,224 per 40 feet last week after practically halving year-to-date.

And northern European market prices, including those offered through Maersk’s internal Twill platform, have fallen dramatically to below US$1,000 per 40ft in recent weeks as demand proved dampening early in the peak season. In fact, twill has been quite aggressive in the market in some cases The Loadstars Forwarder and shipper contacts confirmed that they had signed favorable collective agreements with Maersk’s logistics department.

Meanwhile, today’s Ningbo Containerized Freight Index (NCFI) commentary said the situation of “oversupply” on the route has not improved.

“Freight carriers continue to underbid their space to win more shipping orders,” it said, adding that prices “are still falling.”

The disappointing start to the peak season, with weak demand for Asian exports to the US and Europe, was accompanied by the influx of a number of newly built, ultra-large container ships onto the Asia-Northern Europe trade route. For example, in THE Alliance FE3 loop, four 24,000 TEU vessels will soon replace the 13,400 to 19,870 TEU vessels in service, with the additional capacity and increased allocations being handled by Alliance partners Hapag-Lloyd, ONE, HMM and Yang Ming Need to become.

In addition, the other two East-West ship-sharing alliances have also upgraded their Asia-Northern Europe links with larger ships as ULCVs have been delivered. None more so than the 2M, with MSC’s new, gigantic sisters MSC Irina And MSC Loretoboth of 24,346 TEU, and snatched the title of “world’s largest container ship” from the recently delivered 24,188 TEU OOCL Spain.

Meanwhile, Maersk’s announced “shocking and awesome” FAK rate increase will only work if capacity is withdrawn, but it seems unlikely that MSC will agree to decommission any of its prestigious newbuilds as it prepares to post the 2M Allianz to operate as an independent airline will be dissolved.

However, as the full extent of a damaging second quarter for airlines unfolds – with the possibility of much worse still to come – airlines may look to follow Maersk’s surprise hike with similar versions today in the hope that it will result in a Subeconomic trading period is coming to an early end.

The Loadstar is recognized at the highest levels of logistics and supply chain management as one of the finest sources of influential analysis and commentary.

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