Container shiping freight rates from Asia to Northern Europe unexpectedly rose 16.8 percent over the week ending on Friday due to reduced vessel capacity ahead of the Chinese New Year later in January.
Rates per 20-foot container jumped to US$1,765, a surprise to the market because of continued overcapacity, one source with access to data from the Shanghai Containerised Freight Index told Reuters.
"It's a very important rise in freight rates because we know a lot of new vessels will arrive from shipyards this year," shipping analyst Jacob Pedersen from Sydbank added.
He added that the balance between supply and demand would remain fragile in 2014 because of more and bigger vessels coming to the market.
Average freight rate for transporting 20-foot containers from ports in Asia to Northern Europe was $1,090 in 2013. The index was settled 50 times in 2013. It fell in 41 weeks and went up in nine weeks.
The positive trend was also seen on other routes. Freight rates on routes from Asia to Mediterranean rose 14.1 percent to $1,791. To ports on the US West Coast, the rate increased 0.7 percent to $1,815 and for US East Coast it rose one percent to 3,137, the source said.
Maersk Line, global market leader with nearly 600 container vessels and part of oil and shipping group A P Moller-Maersk , has said it will attempt to hike rates on routes from Asia to Northern Europe by $250 per TEU with effect from January 6. However, the price hike was expected to take effect before the actual date.
Competing liners such as German Hapag Lloyd and Korean Hanjin Shipping have also announced rate hikes of $500 per 20-foot container while Swiss CMA CGM and Israeli ZIM Lines have announced hikes of respectively $300 and $450 per 20-foot container on the Asia-Europe route.
Maersk Line has a market share of around 20 percent on the busy route between Asia and Europe, while its overall global market share is seen to be around 15 percent.
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