Lines “determined to push rates up”

This year it´s all about profitability

Shipping lines appear determined to push for more rate increases to smother any perception in the market that prices are falling, say analysts.

The fall in spot rates for containerized freight on the Asia-Europe trade lane indicated that the shipping lines’ solidarity over general rate increases (GRIs) could fall apart.

The CEO and partner at SeaIntel Maritime Analysis, Lars Jensen, said “there is a limit on how far rates are going to fall, and I don’t think we’re going to see the spectacular decline to the levels we saw at the end of last year.

“In 2011, it was all about carriers maintaining and increasing market share. This year, it’s all about profitability and carriers will do all they can to survive.

“If there are signs of rates spiraling downwards, carriers will take action, be it in laying-up vessels or a greater recourse to super-slow-steaming.

“I think the worst scenario for carriers is that rates will fall a few hundred dollars per teu on where they are now – any more than that and they will be in negative territory again.”

He said that as part of the negotiating game, lines would continue to push for rate hikes “in order to create a climate where there is an anticipation of price increases in the pipeline, when in fact, the real aim of these announcements is to maintain rates at current levels and prevent them from falling”.

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