CONTAINER TRADE | Counting costs

Jane Porter | LLOYD’S LIST

NO CUSTOMER likes price increases, and freight forwarders are understandably incensed at the size of the peak season surcharges Maersk Line is planning to impose on cargoes moving from Asia to Europe in the coming months.

Other lines will also be hiking rates during the northern hemisphere summer when merchandise is shipped to the big consumer markets in readiness for Christmas shopping.

Shippers will be faced with an array of surcharges of various magnitudes, probably covering slightly different periods as carriers all try to differentiate their service offering. For those responsible for booking cargo, life is about to get much harder.

Not only are freight rates soaring, but just finding equipment is becoming difficult after the 18-month long shutdown of many container manufacturers.

It is this shortage of boxes that is enabling lines to impose unusually hefty surcharges. Right now there simply are not enough containers available to meet customer demand. Slow steaming has added to the equipment squeeze, since more containers are needed in the supply chain.

But cargo interests should not complain too much about price fluctuations. Last year, rates crashed to record lows as world trade stuttered and lines were left with half empty ships. Now they are trying to claw back some of the huge financial losses sustained in 2009.

Shippers campaigned for two decades for an end to the conference system that was designed to provide rate stability. They wanted prices to be set by market forces, not collaboration. And that is what they now have.

Safe Seas comment: beware of what you want. You might just get it…

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