From November 1st, Another Shipping Giant Raised The FAK Rate Substantially! Is The Worst Off-season Coming?

Following Hebrot's announcement of a substantial increase in FAK rates for routes from Asia to Europe and North Africa on October 4, CMA's official website announced that from November 1, it would raise FAK rates from Asia to Northern Europe, the Eastern Mediterranean, the Western Mediterranean and North Africa until further notice. Including basic freight and fuel related surcharge.

CMA CGM announced that FAK rates for ports from Asia to northern Europe will be increased to US $1000 / TEU and US $1800 / FEU (including high cabinets and refrigerated containers), including basic freight and fuel-related surcharges.

By contrast, Herberot prices rose to $1050 / TEU and $1750 / FEU.

FAK rates from Asia to basic ports in the western Mediterranean will rise to $1400 / TEU and $2000 / FEU, while Herberot will rise to $1475 / TEU and $1950 / FEU.

In addition, freight rates from Asia to the Eastern Mediterranean and North Africa range from US $1600 to US $2850 for 20" container and US $2100 to US $4700 for 40" container, with destinations including the Adriatic Sea, the Black Sea and Syria.

However, according to historical data, container shipping companies can achieve only a small increase in FAK during the economic downturn, and the good result is that shipping companies achieve the expected growth of 50 per cent.

In addition, many scale shippers have been awarded three-month contracts from shipping companies at prices much lower than those of the new FAK.

So far, no announcements have been made by Maersk or Asian carriers, although these shipping companies are likely to follow suit in terms of size and timing.

However, it is understood that Evergreen, Yangming and other shipping companies also want to shout higher, and are expected to wait until the end of the Golden week holiday to recover cargo volume. It is estimated that they will declare their position around the 20th.

The attempt by two European shipping companies to double the current market rate is a bold move. But on trade routes, severe suspensions are no longer sustainable, and the financial situation in the last quarter of this year is expected to be catastrophic.

A number of shipping companies and freight forwarders said that in the case of less cargo and more ships, and the supply of transport capacity exceeds the transport demand, shipping companies cut prices and scrambled for goods.At present, spot freight rates on the European line have fallen below the cost line, and many ships are running at a loss. At present, the spot market freight rate for every 40"container from Asia to Europe is US $800,850, and the return trip is only US $25,100.

In fact, the rate of collapse in freight rates on many routes may force listed shipping companies to downgrade their full-year performance forecasts.

The rate of erosion in the Asia-Nordic market is even more alarming, with the spot freight index falling 10 per cent every week in September. At the same time, after shipping companies put more excess capacity into trade routes, the volatility in the spot market has now spread to the hitherto stronger Asia-Mediterranean market.

In addition, due to the sharp decline in demand for European exports before the Golden week holiday, resulting in a de facto suspension of services, shipping companies' plans to actively cancel voyages did not have much impact. Shipping companies are preparing for what could be the worst off-season in history. During a maritime event in London a few days ago, a shipping company source said that a radical change is expected to take place in the Asia-Nordic route. She said: "there is news that some winter ring projects will be suspended ahead of the increase in demand for the Chinese Spring Festival. Some things have to be given up, shipping costs have soared and freight rates to northern Europe are still lower than they were before the pandemic. "

In fact, for Ben, the newly built 24000 TEU super large container ship (ULCV) is being delivered every week, which is a very inopportune time. After the trial voyage of these ships at sea, many of the newly built ULCV may face the awkward situation of parking on the Anchorage for months, rather than solemnly holding the first voyage ceremony.