Asia/Europe carriers to request four rate increases in 2005

Asia/Europe carriers to request four rate increases in 2005    Riding a booming market from Asia, shipping lines of the Far Eastern Freight Conference (FEFC) operating in the Asia-to-Europe container trade said Friday they will raise freight rates four times in 2005, except from Japan.
   Like the Transpacific Stabilization Agreement carrier group in the Asia/U.S. trade and the Trans-Atlantic Conference Agreement in the Atlantic, the Far Eastern Freight Conference cited increases in costs experienced by carriers.
   The FEFC plans to raise rates from Asia excluding Japan to North Europe and Mediterranean $150 per TEU on Jan. 1, $250 per TEU on April 1, on by unspecified amounts on July 1 and Oct. 1. Even without including the unspecified July and October increases, the 2005 rate rises planned by the Asia/Europe conference carriers amounts to $800 per forty-foot container.
   Rates from Japan to North Europe and the Mediterranean will be raised $200 per TEU on April 1 for 12-month contracts and by a total of $300 per TEU staggered between April 1 and Oct. 1 for six-month contracts.
   In the weaker eastbound direction, the carrier group also said it will raise rates from North Europe to Asia on Feb. 1, April 1, June 1 and Oct. 1 for shipments other than wastepaper, but without specifying the amounts.
   The conference reported that traffic figures for January to July of this year showed growth of about 17 percent from Europe to Asia and 18 percent from Asia to Europe. “Similar levels of trade growth are expected during 2005,” the FEFC said.
   Commenting on cost increases, the carrier group said daily charter hire rates for ships have increased more than 50 percent in the last year, and shipowners are insisting on longer-term charters at higher rates. It cited increases in costs for feeders, fuel, terminal services and container equipment.
   “The cost of new containers has doubled over the last nine-12 months,” the carrier group said. The leasing companies have also increased their rates and reduced their positioning of empty containers to demand areas, it added.
   FEFC carriers are: ANL, CMA CGM, Egyptian International Shipping, Hapag-Lloyd, Hyundai Merchant Marine, “K” Line, Maersk Sealand, Malaysia International Shipping Corp., MOL, NYK Line, Norasia Container Lines, Orient Overseas Container Line, P&O Nedlloyd and Yangming Marine.