Asia-Europe Ocean FCL Freight Rates - get ready for another rate increase?

Good afternoon All

Here at Straightforward Consultancy, we're managing the freight models for many customers, and the key markets for most UK importers are the US and Asia, and Asia is the one you really need to watch.

Since early 2012, we have seen huge swings in ocean freight full container (FCL) rates from Asia, all related to the lack of demand and excess of containership capacity and on the other side of the coin, the financial performance of the ocean carriers, who can soon move to loss making positions if rates weaken.

We monitor Asia-Europe every week and we've seen rates hit the floor in Jun-2013 to be followed by around USD 1500/TEU (per 20ft container unit) increases in July and August.

So, USD 1500 is a hefty increase but here's the thing. Ever since the last increase in August, rates have been falling (because Peak Season from Asia is actually around August) and here we are, mid-Oct and quite remarkably only TEN percent of the increases are now still in force.

Enter from stage left the carriers, keen to reverse the downward trend with proposed increases of around USD 1000/TEU (20ft). I was sent an piece today by a major forwarder who had listed the increases and they are all between USD 925-1000/TEU - what a coincidence...

So, the question is, what rates are you paying now and are they line with the market - and secondly, what rate increases are you expecting for November 1st?

I think the key message here is that on a market like Asia-Europe, you really need to actively manage and monitor it and keep control of your costs, which is what we're doing for our clients every day.

www.straightforwardconsultancy.co.uk

Kind Regards


Andy Cliff


***************LATEST NEWS*********** 1st November 2013

So today is (was) the big day, the day when the USD 1000/TEU (USD 1000/20ft) increase hit the Asia-Europe market. I was talking to a potential client earlier today who have modest volumes (say 250-300 TEU) ex China/South East Asia and he told me they were paying USD 900/TEU more for November sailings than they did in October....! After I'd almost fallen off my chair, I arranged to meet him to talk about how we manage this area for our clients and keep them competitive and compliant.

So have you checked into this and found out what rates you were paying in October ? And what sort of cost increase you will be paying from now on?
If you want to avoid these sort of cost hikes, please talk to us. It may be the best decision you make this year.

Kind Regards


Andy Cliff
Director

Straightforward Consultancy Ltd
4, Beckett Drive
Winwick Park
Warrington
Cheshire
WA2 8XJ

Tel : 07934 443492
Email : andy@straightforwardconsultancy.co.uk
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