29 March 2012 16:47 [Source: ICIS news]
LONDON (ICIS)--Global container freight rates have shot up in the past three months and will continue to rise, with some routes doubling in price, because of high fuel and insurance costs, as well as piracy and shipping capacity cuts, sources said on Thursday.
A number of shipping companies, including Maersk Line (ML) and the Mediterranean Shipping Company (MSC) have cut vessel capacities on many international lines between Asia and Europe, the US and Africa.
Chemical exporters to Europe and ?xml:namespace>
“Oversupply of container vessels operating on the Asia–
In order to rationalise its service, ML has removed 9% of its vessel capacity currently operating on the Asia–
Rate increases have been implemented on routes between Asia and southern, eastern and western Africa, as well as many other major shipping destinations including northern and southern
Since the 1 March shipping companies operating lines between Asia and
ML will increase freight costs by $250/TEU from Asia to western Africa and by $300-600 per high cube dry (HCD) for 20-40 foot containers to southern
A southern African trader said it is now paying $112/tonne for solid caustic soda delivered in 20 foot containers from
“I hope there are not going to be any more increases because this is already incredibly expensive,” said the trader.
MSC will increase its Asia to western
Caustic soda exporters to Africa said that because of high freight costs they have lost business in parts of
Several sources in the caustic soda market have said ships offloading in
In some cases it can take nearly double the time to offload ships. According to local media, offloading can now take up to eight days compared with the three it normally takes.
“I now have to pay nearly $2,000/container, up from $1,050/container three months ago, from
The main problem is that a large number of containers at the port are not cleared in time because domestic transport companies have been late picking them up.
In addition, piracy along
As a result, firms providing insurance against loss or damage caused by pirate attacks have increased their fees which has resulted in freight rates going up.
According to ICIS, insurance premiums have increased by as much as 43% since last year because of increasing ransom payouts and other costs associated with pirate attacks.
Three months ago it cost about $1,050-1,100/TEU to deliver a container from
“I have reduced my exports by 40% to eastern
If freight rates continue to rise – and there is no indication to say otherwise – it will most likely have a negative impact on chemical pricing in
“Looking at oil prices and current trends, I don’t think freight costs will come down in the near future, rather they will further increase,” said an African caustic soda buyer.
Follow Janos Gal on Twitter for tweets on the caustic soda (
($1 = €0.75)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections