Maersk and CMA CGM to increase freight rates by up to $1,000 per teu

Maersk Line has announced a freight rate hike of US$800 per teu while CMA CGM intends to up its rates by US$1,000 per teu on the Asia-Europe trade from 1 June.

This goes against the grain since total weekly capacity in the Asia-Europe trades is projected to increase by 9.1% in 2015 according to Alphaliner.

Maersk has significant influence in the Asia-Europe trades due to its 20% market share although it has lately been thwarted by overcapacity.

Some carriers had intended to increase their rates by US$800 to US$1,000 on 1 April but decided to postpone the plans.

In the first quarter of the year, Maersk Line’s container volumes fell by 1.6%. However, Maersk Group’s CEO, Nils Andersen, said: “The reason why we gave back a bit of market share was that we did not follow the competition in the speed with which they were cutting rates. Rates went down very fast.”

“We looked at profitability. We don’t look at market share quarter by quarter. We will gain back our market share when we’re ready for it and we’ll do it in a way that conserves our profit.”

A freight rate hike could also happen on the Asia-US trade as the Transpacific Stabilization Agreement (TSA) which comprises 15 of the world’s top 20 shipping lines, has recommended two rate increases and a peak season surcharge in the coming months.

The carriers are calling for $600 per 40-ft container (FEU) rate increases on both 1 June and 1 July, as well as a peak season surcharge (PSS) of $400 per FEU, on 1 July.

TSA executive administrator Brian Conrad said: “We’re fortunate that the US consumer remains strong, port throughput is improving, and operational chokepoints have eased. But it must be remembered that baseline service levels come at a cost.”

The TSA regularly posts guidelines for its members based on industry research but has no enforcement powers.