Asia-Europe rates rise - but for how long? 
 
Shipping lines have been successful in securing rate increases on the Asia to Europe trade, but forwarders have warned that the increases may only be temporary.

Forwarders said carrier rate increases implemented in July had been successful, but not by the amount shipping lines were hoping for.

One major European forwarder, who asked not to be named, confirmed that rates had increased over the last month.

However, he said the increase may only be successful in the short term.

"Shipping lines have taken out so much capacity that the announced increases for the short term will partly stick.

"But it is not clear for how long, with a tremendous overcapacity still hanging over the market that needs to be employed back in the business over the coming few years."

The forwarder added that peak season surcharges, which Maersk Line, Hapag Lloyd and CMA CGM will implement in August, were designed to take advantage of any lack of capacity.

"With the volatile market conditions, carriers are using emergency surcharges to take advantage of temporary upturns of business or temporary decreases of capacity employed or a combination of both. This strategy is partly successful, especially for short-term business."

Paul Goehlert, MD of UK forwarder Mercator Cargo Systems, added that while rates had increased, it would only take a couple of carriers to start introducing laid up ships back into the market for rates to drop back.

"They’ve been successful in implementing the rate increases because the space situation is getting critical out of China, in particular - it’s difficult to get space at short notice.

"The question is will anyone crack and put two or three more ships into service, if three or four of them then follow suit then the rates might soften again."

He added the current average rate for a container was about US$600 per teu before surcharges.

Kuehne + Nagel’s CEO Reinhard Lange said he expected carriers’ Asia-Europe rate increases in July to push the overall price of shipping up by over 20%.

Rates on the trade, including surcharges, had been as low as $350 per teu at the start of the year.

Meanwhile, latest figures from the European Liner Affairs Association show westbound volumes on the Asia to Europe trade tumbled by 20% in May.

However, one bright spot for forwarders and shipping lines was an 8% increase in eastbound carryings.