[070111.EN.SEA] Asia-Europe Lines Delay Hikes Over Supply-Demand Concerns

MOST carriers have delayed January Asia-Europe rate increases after Japanese shipping giants expressed concern over the supply-demand balance. 

A contact at one freight forwarder told IFW that 90 per cent of shipping lines had delayed price increases of between US$250 and $300 they had planned for January 1.

But despite this, spot rates had still increased by $75 to $100 per TEU on January 1, he said, according to London's International Freighting Weekly. Rates were being offered by all but one carrier until January 14 - the new date when carriers are hoping to implement increases.

The forwarder suggested that the delay was down to a few carriers grabbing at market share, which had spooked others into following suit.

According to the Shanghai Containerised Freight Index, rates on services from Asia to Europe ended the year at $1,401 - an increase of $59 on the previous week.

The Shanghai Shipping Exchange (SSE) attributed this to increased vessel utilisation caused by an end of year rush, as exporters sought to fulfil annual production targets.

But the SSE added it remained to be seen whether the carriers' attempts to increase rates would be successful.

The failure of New Year's Day rate increases came as Japanese shipping lines NYK and MOL warned that profits could come under pressure as the gap between supply and demand widened.

MOL president Koichi Muto said: "Emerging countries are growing with strong momentum, leading to further growth in the distribution of goods. Europe, North America and Japan, which make up 60 per cent of world GDP, continue to be burdened by destabilising factors.

This year, we expect many new ships to be delivered to the market, and it is difficult to feel relaxed about the maritime shipping market conditions when you consider the future supply and demand balance for ships."

Said NYK president Yasumi Kudo: "This leaves a widening gap between demand and supply, for which we have to be prepared for some years to come."

Source : HKSG, 07.01.11.

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