FEFC: RATES HAVE STOPPED FALLING ON ASIA/EUROPE TRADE

FEFC: RATES HAVE STOPPED FALLING ON ASIA/EUROPE TRADE    The Far Eastern Freight Conference said that westbound freight rates have stopped falling in the high-volume Asia/Europe container trade.
   “After more than 12 months of declining rate levels the rate restoration on Jan. 1, 2002 on the Asia-Europe sector has resulted in some improvement in freight levels this month,” the conference said.
   “It’s been a reversal of trends,” Rod Riseborough, chief executive of the conference, told American Shipper.
   The Far Eastern Freight Conference had announced a $300-per-TEU rate increase from Asia (except Japan) to Europe, scheduled for Jan. 1. Riseborough said that the conference could not quantify how much of the planned rate increase was actually implemented in January.
   The carrier group warned of further increases in rates later on this year. The carriers’ target is “to restore rates to the levels prevailing in the first quarter of 2001 during the course of 2002,” the conference said.
   “It is recognized that all carriers are sustaining significant losses at the prevailing rate levels and if this situation were to continue it would create unacceptable results for 2002,” the conference said in a statement.
   The conference carriers plan to raise rates by yet-to-be-announced amounts on April 1 and July 1 (for shipments from Asia to Europe) and on March 1 (for shipments from Europe to Asia).
   The rate restoration will comprise rate increases combined with the attainment of minimum rate levels which will be advised for the various routes shortly, the conference said.
   The plan of rate restoration targets by carriers on the Asia/Europe route follows the recent announcement by the Transpacific Stabilization Agreement to bring 2002/2003 service contract rates, effective May 1, back to the level of May 2001.
   The FEFC carriers are APL, CMA CGM, Egyptian International Shipping Co., Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Maersk Sealand, Malaysia International Shipping Corp., MOL, National Shipping Company of Saudi Arabia, Nippon Yusen Kaisha, Orient Overseas Container Line, P&O Nedlloyd Container Line and Yang Ming Marine Transport.