Attention! Freight rates will rise again from April! Major shipping companies begin to adjust freight rates and various surcharges

As we enter the post-epidemic era, countries have different degrees of epidemic blockades and uneven economic recoveries, and shipping companies have strengthened their dominant position in the entire trade route.

Shippers may face a new round of freight rate increases and peak season surcharges (PSS) starting in April.

Shipping lines are understood to have begun to look to traditionally lower-earning backhaul routes in order to restore rates to levels that incentivise the provision of freight containers, rather than the default option of returning empty containers to Asia.

After reducing the GRI (General Rate Increase Surcharge) last September under the influence of regulators, trans-Pacific shipping lines are now preparing to introduce another fare increase next month.

For example, from April 1, Hapag-Lloyd is recommending a GRI of $1,200/40' from Asia to the US and Canada.

Other transpacific carriers typically use a one-month GRI and PSS in the off-season when prices come under pressure .

Meanwhile, although demand on the Asia-Europe route has slowed in the past few weeks, there are no signs of a sharp drop in spot freight rates.

Instead, market expectations are for a “small adjustment” to inflation of 450% since the second half of 2020.

On both sides of the Atlantic, OOCL and Hapag-Lloyd are preparing to increase freight rates from North Europe to the United States by $1,000 per 40' container from April 1.

This traditionally stable trade route typically adjusts by less than $100 in a year.

On the backhaul routes, shipping lines will also increase a range of freight rates and PSS on April 1. For example, CMA CGM's PSS per container shipped from North Europe to Asia increased by $250.

Since October last year, spot prices for the return haul from North Europe to Asia have almost doubled to around $1,600 per 40' container.

This has exacerbated exporters’ woes, with one UK-based freight forwarder telling The Loadstar this week he had been notified of price increases on all his export trade.

"Every one of our export routes is more expensive than it was six months ago, some by a large margin," he said.

And shippers may have to adapt to higher freight rates in the months and even years ahead, upending the cyclical pattern that has defined the liner industry for the past decade.

NYSHEX executives Bryan Most, a former Walmart executive, and Don Davis, a former Hapag-Lloyd executive, believe the rate changes on multiple trade lanes are likely to “continue.”