Container lines winning battle over Asia-Europe freight rate increases

Hard evidence is emerging that container lines have regained the upper hand in the Asia to Europe trades, writes Janet Porter in Amsterdam. A typical westbound freight rate fell from around $1,800 to $1,200 per teu and did not start to recover until the autumn. They are now back to around $1,500, with the Far Eastern Freight Conference planning four increases during the course of 2007 as conditions improve, starting with a $200 per teu hike on January 1. Lines are now in the process of negotiating annual service contracts with some of their largest direct accounts. The FEFC published forecasts earlier this month of 15% westbound growth in 2007, well ahead of the increase in actual, as opposed to nominal, capacity of 11%. MOL’s internal forecasts are similar, with 14% growth projected for 2007. The New World Alliance has no plans to add an extra vessel on some loops and slow down ships in order to save fuel, as some others have done.