Its not business as usual quite yet

Ocean carriers believe we have entered a real recovery phase and many see that the dark days of 2009 are well behind us – headhaul volumes are significantly up on the east-west trades compared with last year, freight rate increases have been successful and laid up capacity is being brought back. A number of new services have been re-installed on the transpacific and Asia-Europe routes and space is still tight as we move into what is historically called the peak season.

However, Neil Dekker, Editor of Drewry’s Container Forecaster, added: “There are some potential de-railers to this renaissance,” noting that it’s not business as usual – yet. The report finds there is still a huge backlog of shipments in the system and once this is moved out of Asia in the next six weeks or so, the true strength of the summer peak season will be somewhat less than many predict.

The report goes on to say that by restricting supply more in line with demand, carriers have learnt that they can improve revenue streams, and are also taking the opportunity to push up freight rates via a succession of GRIs, peak season and now additional equipment surcharges. Although this seems to be presently causing some antagonism, it might also pave the way for successful shipper and carrier partnerships.

Mr Dekker concluded: “Essentially, shippers will be paying a premium for guaranteed shipments and space and equipment requirements. If this is adopted by the industry, then not only do shippers need to build in additional lead time to market, but also bigger overall transportation budgets.”