MSC to levy US$100/box repositioning surcharge on North Europe-Asia trade

2012 03 28

GENEVA's Mediterranean Shipping Company (MSC), the world's second largest container shipping line after Maersk, has issued a notice to trade that it will levy US$100 per container, regardless of size, to cope with a current equipment imbalance.

"To face the extraordinary demand for equipment for cargo destined to Asia" MSC said it was levying the surcharge on all export cargo, including waste, from North Europe, the UK, Scandinavia/Baltic and Russia to the Far East from April 2.

The announcement comes after Maersk issued a statement a week earlier saying that it has stopped taking eastbound cargo bookings from North Europe to Asia on account of insufficient vessel capacity. The shortage was attributed to "a large number of consecutive (westbound) vessel cancellations (from Asia) during the Chinese New Year".

A report, from London's Containerisation International, described these two developments as being "extraordinary", as it points out that at present eastbound vessels are typically less than half full.

It said that according to Container Trades Statistics, eastbound cargo from North Europe to Asia increased by eight per cent in the fourth quarter of 2011, compared to the preceding quarter, to 1,140,392 TEU. More significantly it highlighted cargo volume in January amounted to 377,574 TEU, which it said was less than the monthly average recorded in the fourth quarter of 2011.

"The implication is that, having sorted out westbound freight rate levels, ocean carriers have now turned their hungry eyes to the eastbound trade lane. Others can be expected to follow, therefore, including the Mediterranean, where the dynamics are similar," the report said.

It cited the World Container Index as showing the average all-in rate quoted for spot cargo from Rotterdam to Shanghai was US$541 per FEU, including terminal handling charges at both end, in the week beginning March 19. This, according to the report, "barely covers loading and discharge costs alone". During the same period a year earlier the freight rate was around US$1,050 per FEU, including BAF.

Source Shipping Gazette - Daily Shipping News

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