Maersk ships early movers as IMO unveils Hormuz evacuation plan
The trickle of vessels transiting Hormuz strengthened into a flow almost overnight after the International ...
Photo: Hapag-LLoyd
A carrier-led fightback against precipitously declining freight rates on the Asia-Europe trades was launched today with one of the Gemini Cooperation partners seeking to hike spot rates in the middle of next month.
In attempt to reverse the continued rate decline on the two key Asia-Europe trades, Hapag-Lloyd announced it would implement a range of significant general rate increases (GRIs) on the Asia-North Europe and Asia-Mediterranean trades on 15 October, when the post-Golden Week slack period is expected to end.
The carrier said it would introduce a GRI of $1,200 per 20ft and $2,000 per 40ft on shipments from all Far East ports of origin to North Europe.
On the Far East-West Mediterranean, the GRI will be $1,750 per 20ft and $2,500 per 40ft, while for the East Mediterranean it varies between $1,800 and $2,150 per 20ft, depending on destination region, and $2,600 to $2,700 per 40ft.
The rates include the carrier’s Marine Fuel recovery charge.
The new GRIs are reminiscent of the “shock-and-awe” GRI tactics previously deployed by carriers in times of loss-making spot rate levels – last week, the Shanghai-Rotterdam leg on Drewry’s WCI spot rate index fell below the psychologically important $2,000 per 40ft mark, hitting $1,910 per 40ft.
Indeed, during the last period of persistent spot rate weakness on the Asia-Europe trades, in the final months of 2023, CMA CGM was notable in attempting to more than double FAK rate levels, from below $1,500 to $3,000 per 40ft over the course of a two-week period in December 2023.
However, this time the GRIs will be introduced during a period when carriers are expected to blank considerable capacity in weeks 40-43 – Golden Week is due to start next Wednesday, 1 October (week 40), although many factories in southern China are currently already shut due to Typhoon Ragasa, and could just reopen for a couple of days before the public holiday.
According to recent analysis from Sea-Intelligence Consulting, the Gemini Cooperation – all Hapag-Lloyd’s Asia-Europe services are in conjunction with alliance partner Maersk Line – is set to remove about 25% of its normal capacity from the Asia-Mediterranean route and around 7.5% capacity from the Asia-North Europe trade during this period.
Source: Sea-Intelligence Consulting
However, Ocean Alliance and Premier Alliance carriers, as well as standalone MSC, are all also set to reduce capacity in response to Golden Week, of between 17% and 25% on Asia-North Europe, and 10% to 20% on Asia-Mediterranean, indicating that Gemini is becoming something of an outlier in terms of its trade capacity strategies.
Source: Sea-Intelligence Consulting
“The surge in blank sailings that was anticipated for Golden Week has now clearly materialised,” Sea-Intelligence noted this week.
“However, this analysis shows that the market’s response was far from uniform.
“The acceleration of capacity withdrawals varied in timing across the major tradelanes and was driven by a diverse set of strategies at the alliance level, with clear first-movers and more reactive players shaping the trend.
“While the diversity in strategies – from who moved first to how the capacity cuts were implemented – underscores the complex competitive dynamics at play.
“For shippers, this serves as a clear indication that last-minute network changes and tactical, rather than monolithic, capacity adjustments will likely remain a key feature of the market,” it added.
Comment on this article