News / Falling rates 'fine' – as long as costs fall faster, major container lines warn

16/10/2014

You can forget freight rate hikes – ‘sub-economic’ rates on the main tradelanes are here to stay, according to leading shipping lines meeting at the this week’s TOC Americas conference in Cartagena.

Freight rates pegged below most carriers’ operating costs – good for shippers, bad for inefficient shipping lines – are likely to be par for the course as a result of investments made by lines in vessels with capacity of up to 18,000teu for the foreseeable future.

Carriers which are not ...

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Mike Wackett
October 16, 2014 at 8:20 am
Bunker prices plunged another $24 to around $460 a tonne yesterday and have now fallen by 16% in the past month.
Some more wriggleroom for carrier freight rate discounting?

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Ricky Forman
October 21, 2014 at 1:28 pm
Whilst carriers obsess over lowering unit costs, they should also consider hedging a proportion of their spot income at profitable levels. I always thought there were two sides to a business, income and expenditure…. Ignoring the income side simply doesn’t add up, carriers are offering contract rates for Q1 2015 at $1500 per feu but won’t guarantee income levels at $2400 per feu via hedging. Every stakeholder, investor should be asking their carrier this question….

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