News / Carriers bullish as GRIs push Asia-Europe container shipping rates up by 25%

© Khunaspix Dreamstime.

Cointainer shipping freight rates on the Asia-North Europe jumped almost 25% today as a slew of general rate increases (GRIs) introduced by carriers took effect.

The Shanghai Containerised Freight Index’s Shanghai-North Europe leg stood at $1,256 per teu this morning, an increase of 24.6% from last week’s level of $1,008, and forwarders in the trade report that carriers are becoming increasingly “bullish” in the run-up to Chinese New Year.

Although the rate increases are nowhere near the planned $800-850 figures previously announced by carriers.

G6 alliance partner OOCL increased its rate for a high-cube 40ft by $300 to $2,300 from Chinese base ports. Meanwhile, K Line’s rate for a high-cube 40ft today stood at $2,554 and Mediterranean Shipping Co at $2,900 on the same leg.

In an effort to make up the shortfall between hoped-for and actual rate increases, carriers have announced more  GRIs and peak season surcharges (PSSs) for the beginning of next month.

OOCL has confirming a PSS of $350 per teu on the trade, K-line  a further GRI of $300 per teu, while MSC and MOL have also announced GRIs of $600 per teu, all to take effect on 1 February.

“Space is starting to get slightly tighter from certain origins,” one forwarder told The Loadstar.

However, Freight Investor Services container derivatives broker Ruichard Ward said: “Although utilisation is reportedly in the 90%-plus range, sentiment is more bearish than it was 12 months ago, when many shippers struggled with the huge spike in rates just before the Chinese holiday period.”

China will effectively close down for its annual two-week holiday on 19 February, and carriers are beginning to reveal details of cancelled sailings during the hiatus. OOCL said today it would void its EMX service between Asia and the East Mediterranean and Black Sea in week nine, which begins on 23 February.

Meanwhile, Alphaliner reported this week that the idle fleet was also beginning to grow in anticipation of reduced demand.

“The idle containership fleet has increased slightly in the last two weeks, as the impact of the service withdrawals for the winter slack season is starting to be felt,” it said. “Five ships of above 7,500 teu are currently unemployed, out of a total of 116 ships of over 500 teu that are recorded to be idle as at 12 January 2015.

“However, at 239,500 teu, the idle fleet remains at the lowest recorded level for the month of January since 2009,” it added.