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Container rates will rise even further, to $6,000 /FEU!
May 14, 2024|
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Affected by the aggravation of the Red Sea crisis, ships detour, fleet turnover rate declines, and combined with the shipping company's regulation strategy, the overall shipping space situation is relatively tight in May, and the freight rate will most likely continue to rise in the remaining two weeks. But the freight rate will rise in June! Recently, Maersk, CMA announced to continue to raise FAK rates. Among them, Maersk will pay 5.900 dollars per 40-foot container, while CMA CGM will raise the price by 1.000 dollars to 6.000 dollars per 40-foot container.
1. Cma CGM has once again increased FAK rates from Asia to Northern Europe
On May 10. CMA released a notice on its official website that the new FAK rate from Asia to Northern Europe will be adjusted up to 6000 USD /FEU starting from June 1. 2024 (loading date at the departure port).
The price increase is $500 to $3.200 for 20-foot containers and $1.000 to $6.000 for 40-foot and 40-foot tall containers. Details are as follows:
Port of Origin: from all Asian ports (including Japan, Southeast Asia and Bangladesh)
Destination port: to all Northern European ports (including UK and full range from Portugal to Finland/Estonia)
Container type: dry container, OOG, paid empty container & refrigerator
Implementation date: From 1 June 2024 (loading date at departure port) until further notice
2. Maersk increased FAK rates in Northern Europe
On May 9. Maersk issued a notice that it would increase the FAK rate from the Asian basic port to Rotterdam, Gdansk, Felicstowe, Aarhus, Gothenburg and Oslo in northern Europe from June 3. $2.825 - $2.975 per 20-foot container and $5.500 - $5.900 per 40-foot container.
The freight market has recently shown remarkable movement. A freight forwarder in the UK said the growth was being driven by demand, as well as careful capacity management by carriers.
Currently, there are no small challenges in booking containers into Europe in the contract market, spot market and FAK market. This is mainly because the market is currently controlled by operators, and traders and importers need to flexibly adjust their strategies to cope with this situation.
However, one source predicted that rates could see a significant increase in the second half of May and predicted that rates could climb to $5.000 per 40 feet on the Asia-to-Northern Europe route by June, while Asia-to-Mediterranean routes could hit $5.400.
Peter Sand, chief analyst at Xeneta, said the market move may have led many customers to believe the peak season was coming early. He further noted that with such tight freight rates and capacity already occurring in traditionally low demand quarters, if demand does pick up in the third quarter, then freight rates could rise again.
He also mentioned that the peak for freight rates this year came on Jan. 22. when XSI's Asia-to-Northern Europe route hit $4.857 per 40 feet. As a result, he predicted freight rates would likely exceed that peak again.
