by Jared Vineyard
Coming off a year with losses in the billions, carriers have been working hard at increasing freight rates this year. The Drewry Container Rate Benchmark indicates success as it measured a freight rate increase of 19.9% over the course of a week from Hong Kong to Los Angeles.
This jump of about 20% is right on the heels of the most recent General Rate Increase (GRI) from carriers desperate to return container freight rates to profitable levels.
“The index hit a low of close to $1,400 per-FEU in early January. Since then, the rate surged to around $1,800 per FEU and has stayed above $1,770 per FEU each week into March,” according to a recent article from Journal of Commerce.
The year began with a GRI from carriers to help raise those numbers and two more have hit just since the above quoted article was published.
Both March 15th and April 15th saw a GRI imposed on eastbound Pacific containerized ocean shipping.
The major trans-Pacific shipping lines have come together in the Transpacific Stabilization Agreement, allowing them to plan and synchronize GRIs like the March and April ones that raised frieght rates per FEU by $300 and $400 respectively.
Some international shippers think this is like the 1960’s Batman movie where all the villains teamed up in an evil conspiracy. Holy carrier collusion, Batman–freight rates are out of control!
However, carriers really shouldn’t be thought of as the bad guys when it comes to international shipping. Carriers provide services that allow importers and exporters to do international business.
These freight rate increases are not all bad news. Riddle me this: How can freight rate increases actually be good for international shippers? Read our blog on that topic.
For a free freight rate quote, click here.