Several shipping companies announced freight rate increases in August

As soon as July began, some well-known shipping companies began to announce that they would raise freight rates on August 1, with a 40-foot container price increase of $2,000. Recently, many shipping companies have leased ships at high prices, which seems to be an optimistic expectation of the market; however, with the launch of new ships, increased capacity, and small shipping companies entering the ocean routes, how much can freight rates actually increase? We will wait and see!

Many well-known shipping companies, including Yang Ming Marine Transport and ZIM Shipping, issued notices to customers on July 2, announcing that starting from August 1, they will charge GRI (General Rate Surcharge) for container cargo shipped from the Far East to North America. Specifically, an additional $1,800 will be charged for each 20-foot standard container (TEU), and an additional $2,000 will be charged for each 40-foot high container (FEU). This move indicates that the increase in freight rates will be further expanded, reflecting the shipping industry's optimistic expectations for the shipping market in the third quarter.

In a statement on the 1st, global shipping giant Maersk stressed that in the face of the continued obstruction of the Red Sea shipping channel, and this situation is expected to continue until the third quarter, both shipping companies and corporate customers are facing unprecedented challenges.

At the same time, Yang Ming Marine Transport also sent a positive signal at the shareholders' meeting at the end of June, pointing out that as the third quarter enters the traditional peak season for freight in Europe and the United States, the container shipping industry will operate at full capacity, providing solid support for the increase in freight rates. Yang Ming Marine Transport said that the current global shipping market is still disturbed by a variety of external factors, resulting in a serious imbalance between market supply and demand. Despite full capacity, it is still difficult to find a box in July.

The freight forwarding company revealed that Yang Ming Marine Transport's freight rate adjustment for the US East Coast route on the 1st of this month did not keep up with the industry's leading companies. It was originally planned to increase by US$2,000 per large box, but in fact it was only increased by US$1,000. The company plans to increase the peak season surcharge for direct customers in the middle of this month, and announced that it will try to raise the freight rate per container to US$2,000 again on August 1. This move is seen as a preventive measure against a potential market surge. It has reported to the relevant shipping regulatory authorities in advance and notified customers, but the actual increase needs to be further observed based on market conditions.

Industry insiders pointed out that Yang Ming Marine Transport was originally scheduled to announce last Friday that it would follow the practice of Mediterranean Shipping and other companies to increase the freight rate per container on the East Coast route from US$1,000 to US$2,000. However, due to the hasty notification of this adjustment, the shippers reacted more resistantly, and Yang Ming Marine Transport finally decided to increase the freight rate by only US$1,000, just like the West Coast route. In addition, Yang Ming also plans to adjust the peak season surcharge for direct customers again on July 15, which is expected to increase significantly from US$600 per container to US$1,800-2,000 to keep in line with the strategy of the leading shipping companies.

Freight forwarding companies analyzed that, given that there are more overtime ships and new routes on the West Coast of the United States, subsequent freight rates may be loosened. The East Coast of the United States is facing high pressure to continue to rise. As for whether the increase of US$2,000 per large box can be successfully achieved on August 1, it will take time to further verify.

Yang Ming Marine Transport said that the company has reported the price increase plan for the European and American routes on July 15 and August 1, but emphasized that the actual increase will be flexibly adjusted according to market dynamics and will not be completely bound by the reported price.

However, the shipping industry is generally confident about the prosperous prospects of the shipping market in the third quarter, and the reasons behind it are multiple and complex. On the one hand, the crisis situation in the Red Sea region has not been significantly alleviated, and it continues to put pressure on global shipping routes. On the other hand, the recovery of economic activities in Europe and the United States has led to a rebound in consumer demand. In addition, due to the impact of the policy of the United States and other countries to impose tariffs on imported goods, retailers have made early arrangements and increased inventory to cope with potential market fluctuations. This behavior directly promoted the significant growth of export cargo volume in Asia.

In addition, the labor negotiations that will be held in Canada and the east coast of the United States have also added uncertainty to the market. These variables may further aggravate the tension in the global supply chain and may drive the short-term freight rates to continue to rise. However, according to current market feedback, some low-value goods have given up shipping due to cost reasons. The head of a super-large freight forwarding company believes that given the sharp increase in freight rates on the east coast of the United States and the introduction of overtime ships, if there is not enough cargo support, freight rates may fall back quickly.