Liners unveil Asia-Europe FAK price hikes to arrest steady rate decline
Container shipping lines are looking for a hike in Asia-Europe spot freight rates, announcing a ...
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By Mike Wackett
CMA CGM subsidiary APL has launched a premium service it says will “promise equipment and vessel space” on specific Asia to US services.
Jesper Stenbak, APL senior vice president for the route explained: “Eagle Go Guaranteed seeks to address the concerns of equipment and vessel space shortages as the transpacific trading season goes full steam.
“It guarantees priority shipments on APL services, allowing shippers to optimally capitalise on the year-end holiday shopping season.”
The money-back guarantee is applicable to 20 routes from Shanghai, Ningbo and Yantian in China and Cai Mep in Vietnam, including the Eagle Express (EX1), South China 1 (SC1) and Pendulum Loop 1 (PE1) services, which serve the US west coast, and six loops to the east coast.
APL said the new product complemented premium service offering Eagle GET and Eagle REACH, which guarantee shippers priority discharge of containers and “day-definite” arrival on nominated transpacific services.
The priority shipment product subtitled “No roll. Sure to GO” will be available on APL’s transpacific services effective 1 November, with rates apparently quoted on application.
However, previous attempts to upsell services from Asia to a premium rate guaranteed product have met with limited success, including the much-heralded Daily Maersk on Asia-North Europe, launched in 2011, which the Danish carrier’s executives eventually admitted had seen a “disappointing” take up. The product was officially scrapped in 2015.
“Shippers are just not prepared to pay the extra,” one senior Maersk Line manager told The Loadstar at the time.
However, several Asia to North Europe shippers have told The Loadstar that recently some carriers have introduced what is effectively a two-tier pricing system: VIP rates that guarantee equipment and vessel space, and those that do not. And one UK forwarder said the cheaper rates often meant shipments were split and/or off-loaded en route to free slots for better-paying freight.
Meanwhile, recent SeaIntelligence analysis of data from major carriers shows a positive correlation between container line profitability and schedule reliability.
However, the consultant admitted that it could not be precise on where the added profitability came from, but argued that, in general, on-time arrivals resulted in lower operational costs for the carrier.
There were mixed signals to support the SeaIntellligence report. Hyundai Merchant Marine (HMM), which has consistently ranked highly in SeaIntel’s monthly service reliability table, was the least-profitable carrier in the first six months of this year, recording a net loss of $227m.
In contrast, APL, since coming under the umbrella of CMA CGM, has turned a profit this year after several quarters of negative results, contributing $116m to the French carrier’s bottom line.
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