Hapag-Lloyd has joined CMA CGM in placing a cap on spot freight rates for containerized cargoes. The German container line told Lloyd’s List that it has not been imposing any further hikes for a few weeks. “We believe spot rates have peaked, and we do not pursue further increases,” it said. “We hope that the market will slowly start to calm down.”
CMA CGM said in a customer advisory on September 9 that any further increases in spot rates would be halted with immediate effect until February 1. This applies to all services operated under its brands, including CNC, Containerships, ANL, APL, and Mercosul, as well as CMA CGM. Hapag-Lloyd said the rate freeze would be in effect “for the time being”. Other container lines have been contacted to see if they will be following suit.
Spot rates, which cover a large share of containerized cargo, are driven by market forces and the huge surge in demand over the past year has pushed rates up to unprecedented levels. The latest Shanghai Containerized Freight Index shows that rates between China and northern Europe averaged $7,491 per teu over the past week while in the transpacific trades, the average now stands at $6,322 per feu. Shippers have been complaining vociferously about the huge increase in ocean transport costs they have faced, but cargo interests have been driving up prices in bidding wars for whatever slots were available.
CMA CGM said it was prioritizing its long-term relationship with customers “in the face of an unprecedented situation in the shipping industry”. The French container line expects market-driven rates to continue rising in the coming months but has nevertheless pledged not to charge these to customers.
Hapag-Lloyd chief executive Rolf Habben Jansen appeared to rule out any sort of price controls when he said there was such huge demand for space. “If we tried to not follow the market, we then get so many bookings that our system collapses. But today there is very little space left for additional cargo, which is leading to these crazy rates,” he said in the past month. However, two of the world’s top box lines have now taken the lead in trying to buck the market and restore rates to more reasonable levels.