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, but Asia is the one you really need to watch and manage carefully.
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 in mid-Oct, quite remarkably only TEN percent of the increases are now still in force. Having said that, it depends on whether you actively manage your freight model because the customer's rates tend to lag behind the market on the way down...sound familiar?
Enter from stage left the carriers, keen to reverse the downward trend with proposed increases of around USD 1000/TEU (20ft).
Last Friday, Nov 1st, the USD 1000/20ft increase hit the Asia-Europe market. I talked to a potential client last week 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....!
On Monday 4th Nov, we learned how much of the rate increase was actually accepted by the market and it was an eye watering USD 753/TEU (USD 1500/40ft container). We negotiated a very modest increase on our already competitive rates but we do have the volume over our client base which they all benefit from.
Please do take action on this, you really could be paying 50% more than necessary. As always happy to help, please join our band of extremely satisfied customers (see wesbite or Linkedin for details).
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
Web : www.straightforwardconsultancy.co.uk
Blog : http://straightforwardconsultancy.blogspot.co.uk/
Twitter: @AndyCliffSCL
Linkedin: http://uk.linkedin.com/pub/andy-cliff/1a/43/72
Skype: andy.cliff1@skype.com
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