Container rates soar as China booms

Container shipping rates are set to soar as the rate of China's export growth shows no signs of slowing and the price of fuel continues to rise.

The trade body that covers shipping lines between Asia and the US said it would be recommending increases of US$400 for each TEU sent from Asia to the west coast of the US, and $600 for trips to other US ports. The rate per container currently stands at around $2,800.

The move follows increases on routes between Asia and Europe, where rates have already risen by as much as nine percent in the third quarter - the biggest hike for three years - as the price of crude oil used to make marine bunker fuel edges closer to $100 a barrel.

Ronald Widdows, chairman of the Transpacific Stabilisation Agreement, said lines will, of necessity, be pressing the issue of a full, floating bunker charge very seriously in upcoming contract negotiations.

He said some carriers could be plunged into financial problems if the price rises continue. He said at current price levels, fuel is no longer just another cost component. He said the industry is at a point where service levels are at minimum and, for some carriers, financial viability is threatened if these costs are not shared equitably.

The organisation said that other costs, including port handling fees, were expected to rise by a similar amount as global economic growth continued.

However, some in the industry have warned that price rises have attracted so much new capacity that the industry could face problems in the future in the event of a global slowdown.