FEFC lines target eastbound rates

EFFORTS to improve the profitability of container services from northern Europe to Asia are being ramped up after an apparently successful start to last year’s campaign to reject low-paying cargo.

As lines struggle to cope with soaring costs and equipment imbalances, they are also being far more selective about the cargo they accept on the return leg to Asia.

Far Eastern Freight Conference members are revising their new eastbound tariff from northern Europe that was introduced last October, with a number of upwards adjustments that will be effective June 1.

At the lowest level, shippers will see the tariff rate for moving a 20 ft container loaded with basic commodities or spot cargo rising from $100 to $200. That does not include surcharges covering currency and bunker adjustments, and terminal handling

For waste paper and plastics, the freight rate is to go up from $250 to $350 per teu. But for chilled cargo, rates are being adjusted downwards slightly to $1,600 from $1,700 previously, although those for deep frozen cargo will increase.

The FEFC took concerted action late last year after seeing ocean rates effectively slide into negative territory after stripping out surcharges for fuel and terminal handling from the all-in prices carriers were charging customers.

Member lines said at the time they were expecting to lose up to a quarter of their eastbound liftings to independent lines by refusing to accept unprofitable cargo.

That recovery programme “was reasonably successful,” the FEFC said this week.

“But it must be understood that freight rates have not yet reached a level which would support the premium services offered by the FEFC lines.”

However, individual lines contacted by Lloyd’s List claimed that both freight rates and volumes had increased over the past few months, as shippers recognised the need to pay more rather than risk being turned away by carriers.

The October initiative “was pretty successful”, said one trade manager, with the strength of the euro not seeming to have a negative impact on shipments to Europe.

The FEFC also announced today that a peak season surcharge of $158 per teu would be levied between June 1 and October 17 on cargo moving from Asia to the Mediterranean. Details of the peak season surcharge for northern Europe will be decided at a later stage.