Global container rates expected to climb higher

LONDON, Eng. — For the first time since mid-2008, average global container freight rates experienced a year-on-year increase, according to the Drewry Global Freight Rate Index

Analysts in London said the index has recovered by 3 percent in the year to November 2009.

Philip Damas, director of Drewry Supply Chain Advisors, says on routes such as Asia to Europe, the year-on-year increase in spot rates amounts to at least 40 percent. Shippers have told him they are being asked to agree to much higher freight rates under annual contracts renewed in early 2010.

He added that February is a critical period for many shippers because a high proportion of annual contracts are renewed then.

Drewry believes that the potential for further increases in spot freight rates is now generally limited, except for the transpacific trade. Drewry’s consultants expect a sharp increase in spot transpacific rates as new capacity reductions can still stimulate some significant rate recovery in that trade.

A tighter supply-demand balance should push up transpacific spot rates in early 2010 despite the growing percentage of the fleet being laid up.

Contrary to spot rates, contract freight rates are expected by Drewry to go up significantly, when compared to the low levels of previous contract deals. With spot freight rates now consistently higher than a year ago on most trade routes, contract negotiations taking place in early 2010 will be influenced by a different market environment and upwards pricing pressures.

Drewry has forecast for some time that average container freight rates, including fuel surcharges, will be about 15 percent higher in 2010 than in 2009. 


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