Maersk in Massive Rate Hike
In a move that would increase rates by 190%, world-leading carrier Maersk Line is planning to raise key Asia-Northern Europe rates by US$400 per TEU from April 1, 2016, as well as rates from Asia to the Mediterranean by $500, according to Reuters.
Neil Davidson, Senior Analyst of Ports and Terminals at Drewry, said: “Periodically carriers seek to raise the freight rates by announcing these sorts of rate increases, but in the end, the market still decides what the "right" price level is, and so whether such increases stick in practice remains to be seen.
“History tells us that often they don't because shippers are aware of market conditions and act accordingly. For carriers, efforts to control (reduce) the amount of ship capacity deployed on a route can be more effective in achieving improved freight rates.”
The move appears to be the latest development from the line to recover from a saturated market, along with its intention to cut capacity on key routes.
As the global economy recovers from the recent downturn in China, the only way for the container market to recover could be, as Mr Davidson proffers, to allow a natural equilibrium between supply-demand.