OCEAN & AIRFREIGHT UPDATE – JULY 2011

Far East & Indian sub-cont westbound (import) rates/space/equipment – It is pleasing to report that carriers have postponed intended rate increases for July 2011. Whilst there are some equipment shortages in China and Malaysian ports slow steaming continues to affect equipment turnaround times. Supply still exceeds demand and thus it is very difficult for carriers to push through rate increases.

Whilst 2010 saw record profits for carriers 2011 to date is witnessing significant losses such that several carriers are considering emergency measures and the removal of vessels. It is clear however that present low rates are not sustainable and it is inevitable that significant increases will have to be made in the near future.

Far East & Indian sub-cont eastbound rates/space/equipment (exports) – Exports rates remain extremely low with many containers being returned to the Far East empty and this adds to carriers losses.

UK Terminal Handling charges – generally remain at £120 except Maersk and SafMarine where THC is £131 per container and MSC where THC is £125 per container.

Heavyweight Container Surcharges – continue for westbound traffic only with each carrier having slightly different weight break points. It should be noted that this surcharge is not part of any ‘all-inclusive’ rate.

North China 20ft Equipment Premium (westbound only) – This charge continues to be applied by all lines on 20ft containers ex Dalian, Qingdao, Tianjin, Xingang, Yantai and Lianyungang at $250 per 20ft container only.

Suez Canal Surcharge – remains at $25 per TEU except Evergreen ($47 per TEU).

Gulf of Aden Emergency Risk Surcharge – this surcharge is now $55 per TEU.

Equipment Inspection Fee – Hapag Lloyd has introduced a surcharge of £6.00 per container as the result of packaging being dumped inside ‘empty’, returned containers. No other carrier has yet applied this surcharge.

UK Landside Charges/Haulage/Fuel/Port Congestion – Fuel Surcharge remains at 25.5% (against a base price of £0.90 ppl) on most published indices.

An infrastructure charge of £3.00 per container continues at Southampton.

Proposed ‘No-show’ fee – over booking and inaccurate booking and lateness in arrival of containers at port are likely to face cancellation fees of around $100 per container. It is not expected that this cancellation charge will introduced until the capacity issue is addressed.

Airfreight – fuel/security surcharges are expected to continue. Current rates:

Hong Kong  8.80 HK$ (combined) per kg.

Shanghai     9.20 CNY (combined) per kg.

Kevin Fryer 16th July 2011.

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