Peak season and port congestion surcharges spread to Asian tradelanes

24 Nov Peak season and port congestion surcharges spread to Asian tradelanes

On Asian trade lanes, shipping lines slapped a raft of peak season and port congestion surcharges.

Alphaliner said this week that SCFI spot prices for Chinese exports are expected to continue growing due to carriers’ peak season surcharges on “numerous routes or significantly higher FAK rates for December.”

For example, CMA CGM would implement a peak season surcharge of $500 per teu from all Asian ports to the Mediterranean and North Africa.

And the worsening shortage of 40ft containers drives spot prices on intra-Asian roads, Alphaliner said, noting last week a “spectacular” 53 percent rise of $253 per teu on Shanghai-Singapore.

The analyst said: “Values for this path, weighing 7.5% in the SCFI index, are now $728 per teu, up from just $170 per teu three weeks ago. Spot prices between Shanghai and Busan also increased by 34% last week to $195 per teu.”

Today’s SCFI saw carriers make further gains on Shanghai-Singapore, which grew another 10.2 percent week to $802 per teu.

However, Shanghai-Busan trade appears to have stabilized, as prices fell $7 this week at $188 per teu.

In its Q3 results, HMM noticed the uptick in intra-Asia prices, the carrier blaming the lack of equipment on east-west trades spreading to Asian networks.

Indeed, Otto Schacht, EVP maritime logistics at Kuehne + Nagel, said 15 vessels were currently anchored outside LA-Long Beach waiting for a berth.

“We saw 2015 last time,” he said. “Terminal capability is at its limits with a volume surge. This causes equipment issues,[and] Asia urgently needs empty export containers. The situation probably won’t change before the Chinese New Year[in February].”

Yesterday, Hapag-Lloyd announced a peak season surcharge for China-to-Intra-Asia cargo of $500 and $1,000 per teu and feu, effective during December, claiming: “This surcharge gives us the opportunity to offer you the quality of service you are used to.”

MSC is to apply Monday’s $1,500 congestion surcharge on Europe-origin freight, while CMA CGM has added $1,250.

A bout of port congestion in Tianjin also resulted in carriers introducing China import surcharges, after Covid-19 tests on reefer cargo resulted in significant disruption to inbound operations.

While carriers blame an unforeseen increase in demand for global box shortages, forwarders continue to criticize them for “profiting from a problem they created.”

Mads Drejer, COO for air, ocean, and rail at Scan Global Logistics said: “Container carriers introducing a range of blank sailing, especially during the initial period of the Covid-19 phase, to manage capacity and ultimately drive up prices, resulted in a fundamental gap in the global repositioning of empty containers.”

And he accused carriers of “pursuing short-term profits over supply chain stability by directing container equipment to trades where the highest price is available and not where equipment is needed,” adding: “As a result, 2020 is expected to be one of the best years of profits ever recorded for ocean carriers.”