Is the freight really going up?
As shipping companies take advantage of strict capacity management and start the freight rate recovery plan in their service networks in the next few weeks, the extremely low freight rate may be coming to an end. In addition, as shipping companies raise fuel surcharges to mitigate the impact of rising fuel costs, shippers may face an increase in fuel surcharges.
Shipping carriers are preparing to launch a series of GRI this spring to raise freight rates before the peak season. Hapag-Beurotte took the lead in raising the freight rate from Asia to the United States by an astonishing $1,000 per 40-foot container from May 1st. (Check the article: the price increase is 800-1000 dollars! Shipping company raises American Line GRI, effective May 1st)
On March 31st, the German shipping company released the customer information of freight rate increase. In view of the fact that the retailer's inventory is still too high due to inflation for a long time, the trade route is still in a dangerous state, which surprised the whole industry.
In fact, in order to alleviate the weak demand, the shipping company plans to cancel as many as 50 voyages from Asia to the east and west of the United States this month. The spot freight rate of containers from Asia to the United States and the West has plummeted from more than $20,000 per 40-foot container in mid-2021 to only $1,000. It is urgent for carriers to raise the spot freight rate to promote the stagnant annual contract negotiations.
After the OPEC+OPEC unexpectedly decided to cut production on Sunday, oil prices soared, which may lead shippers to face a new round of fuel surcharge.The price of Brent Crude oil rose by about $10 to $82 per barrel on the 4th, putting pressure on the fuel supply market, which led to the price of compliant low-sulfur fuel from Rotterdam rising by $25 to $595 per ton on the 4th. In the next few weeks, fuel prices may continue to rise, which will trigger the BAF of shipping companies to rise.
Earlier, some large freight forwarders pointed out that other shipping companies, including Yangming, Evergreen, Yixing, Meisen, etc., have informed that the freight rate per container (40-foot container) will increase by 600-1000 US dollars in April, and it is estimated that it can actually increase by about 300 US dollars. Some freight forwarders pointed out that the weekly cargo volume has increased slightly recently, and the shipping space is insufficient when the shipping company reduces the number of shifts. In addition, because the length of the American line is about to expire at the end of April, the new contract negotiations are currently underway, and the shipping company also needs to raise the spot market freight rate to facilitate the long-term negotiation. However, due to the high increase in capacity this year, the estimated new capacity is not easy to digest. The shipping company revealed that the current spot price is about $1,050, and the goal is to raise it to more than $1,500.