Drewry reports box rate rise

Drewry reports box rate rise    Shippers are being asked to foot much higher freight rates as service contracts renew this year.
   'On routes such as Asia to Europe, the year-on-year increase in spot rates amounts to at least 40 percent, and we know from shippers that they are asked to agree to much higher freight rates under annual contracts renewed in early 2010,' said Philip Damas, director of Drewry Supply Chain Advisors. “January and February are a critical period for many shippers because a high proportion of annual contracts are renewed then.”
   Damas made his remarks as the London-based shipping consultant released its December 2009 Container Freight Rate Insight report.

Damas

   Drewry said that for the first time since mid-2008, average global container freight rates experienced a year-on-year increase in late 2009. Drewry’s Global Freight Rate Index recovered by 3 percent in the year to November 2009, after collapsing the first half of 2009. Between September and November, the global 'all-in' container freight rate index rose from $2,040 per 40-foot container to $2,160, maintaining a trend of price rises that has lasted for more than six months. However, Drewry said average global freight rates in late 2009 were still about 20 percent below the peak of 2007.
   Drewry believes the potential for further increases in spot freight rates is generally limited, except for the transpacific trade where container carriers just implemented an emergency rate charge last week, an action that brought protests from the Asian Shippers Council.
   Drewry said its consultants expect a sharp increase in spot transpacific rates from mid-January, as new capacity reductions can still stimulate some significant rate recovery in that trade. A tighter supply-demand balance should push up transpacific spot rates in early 2010 despite the growing percentage of the fleet being laid up.
   Contrary to spot rates, Drewry expects contract freight rates to rise significantly, when compared to the low levels of previous contract deals.
   “With spot freight rates now consistently higher than a year ago on most trade routes, contract negotiations taking place in early 2010 will be influenced by a different market environment and upwards pricing pressure,” Drewry said, forecasting that average container freight rates, including fuel surcharges, will be about 15 percent higher in 2010 than in 2009. ' Chris Dupin