Container Shipping Industry to Raise Freight Rates

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The deteriorating container shipping industry amid the ongoing recession is taking actions to increase freight rates in a bid to counter difficulties stemmed from plunging freight rates as negotiation season nears. Hanjin Shipping and Hyundai Merchant Marine Co,Ltd., the nation’s leading container shipping companies, sent an official document to shippers, announcing the increase in freight rates on a route between Asia and Europe to approximately $250 to $300 from April 1 this year. The world’s largest shipping companies such as Denmark-based Maersk Line, Tokyo-based Mitsui O.S.K Lines (MOL) and Taiwan-based Evergreen Line have all decided to raise their freight rates on the route between Asia and Europe to $300 starting the next month as well.
The decision was inevitable as the plunge in freight fees dropped to break-even point due to a sharp decline in cargo volumes. It has been conveyed that freight rate between Asia and Europe which is determined in every quarter has soared to around $500 per 1 twenty-foot equivalent unit (TEU).
A source from the container shipping industry cautiously warned the possible collapse of container shipping industry saying that, “If the current circumstance continues further, this industry will soon collapse, and thus raising the rates to reduce the burgeoning gap between the surging cost of shipping and the actual freight rates is the only way for the industry to survive.”
Source: Maeil Business