Transpacific freight rates could surge by 50pc

Container freight rates on transpacific services from Asia to the US could surge by around half by May if shipping lines succeed in pushing through planned rate increases.

This comes after 15 container shipping lines belonging to the Transpacific Stabilisation Agreement recommended rate increases of US$400 per 40-foot container (FEU) to US west coast ports and US$600 per feu to all other US destinations from April.

The carriers, including the Tung-family controlled Orient Overseas Container Line and Cosco Container Lines, put forward the plan in a notice issued from the US yesterday.

The latest planned rate increase comes on top of recommended increases in freight rates for new service contracts that will be negotiated shortly between shipping lines and cargo owners and typically come into force in May. The TSA has recommended a rise of US$800 per feu in contracts for cargo shipped to the west coast and up to US$1,200 per feu from Asia to other US cities.

If box lines are successful with these rates increases, the cost of shipping a 40-foot container to west coast ports such as Long Beach or Oakland will rise by US$1,200.

Maritime consultant Drewry said shipping a 40-foot container from Hong Kong to Los Angeles cost US$2,524 in mid-January. Shipping a 40-foot container from Shanghai to the US west coast cost US$2,475, according to the Shanghai containerised freight index published by the Shanghai Shipping Exchange last Friday.