Box Shippers to Raise U.S.-Asia Contract Rates Despite Low Bunker Prices

by Ship & Bunker News Team
Wednesday March 4, 2015

Maersk Line CEO Soren Skou this week said at the annual Trans-Pacific Marine conference in Long Beach that he expects to negotiate higher contract rates on U.S.-Asia routes towards May 2016, despite low bunker prices, ShippingWatch reports.

"I think, in the U.S., we will see higher contract rates towards May 2016, since the long deals will always be affected in some degree by the spot rates," said Skou.

Spot rates in the Pacific are said to have passed $5,000 per forty-foot equivalent unit (FFE), a rate not seen for some years.

"Supply and demand rule the market," not oil prices, said Skou.

When oil prices rose a few years ago from $30 to $130 per barrel, container rates fell in the same period, he added.

While acknowledging that "we are facing the Walmarts of the world," he said U.S.-Asia routes could see rising freight rates while bunker prices remained low.

The U.S. economy is said to be receiving a boost in demand for consumer goods on the back of cheap energy prices, with Skou describing it as a "bright spot," while congestion at U.S. West Coast ports are adding to supply constraints.

Other unnamed conference participants are said to have sounded a note of caution, however, saying Skou had an interest in talking up the market at a time when contract rate negotiations were beginning.

One U.S. importer of Chinese goods said they would wait until the latest possible moment to agree contract rates, hoping that easing congestion at U.S. West Coast ports would lead to a drop in spot rates.

Ship & Bunker News Team
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