Saturday, June 24, 2017 | ISSN 0719-241X

Chinese and European routes to boost maritime transport

Freight rates are starting to recover
Edition of February 27, 2017

The Chinese New Year usually means a commercial boost and good times for the maritime industry, but 2016 showed record lows. However, despite the below-average rates for the 2017 Chinese New Year, better times are on the horizon.

South America is reaping the most benefits, with ships coming in from China and Europe boosting the maritime transport industry. For example, China Main Ports- South America ports per 40’ container rates at end February 2017 were  US$1,963, while end February 2016 were only US$632, market average price, an increase of approximately 200% year on year, which is a solid foundation for carriers to begin cutting their losses in this corridor and start the move to positive numbers. This is by far the best market for shipping carriers to make money instead of handing away money.

The South America - Europe corridor is also in good shape. Maersk’s acquisition of Hamburg Süd will give them a 70% market share mainly on reefers on the South America to Europe corridor. This is good news for Maersk as they very well will control the majority of that market and will have the upper hand in contract negotiations. It perhaps is not that good news for shippers.  
Back to 2014

If the market stays in “healthy” conditions, rates could rise to 2015 levels and, in best case scenario, even to 2014 levels. According to Xeneta, the average rate for the market average price in 2014 for a 40’ container on China Main – North Europe was US$2,504. Today, so far, the average rate of the market average price stands at US$1,974. If this trend continues, the 2015 gap will definitely be covered and we could potentially see the market nearing 2014 prices.

By MundoMaritimo

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