Shipping lines are working to turn the tide on freight rates this year, with potential implications for retailers, manufacturers and others heavily dependent on overseas cargo, the Wall Street Journal reports.
Last year, overcapacity contributed to declining rates for containerized shipping, in which primarily manufactured goods -- ranging from clothes to electronics to toys -- are packed into 20- or 40-foot-long metal boxes and loaded onto enormous container ships. That reduced costs for many importers but resulted in lower profits for many shipping lines, including market leader AP Moller-Maersk, and caused losses for others. Higher fuel costs made things worse.
This year, shipping lines locked in negotiations with their customers are pushing to maintain or even increase the rates they charge to transport goods from Asia to North America, the world's busiest routes for containerized trade.
"Shipping lines are holding very firmly to their positions, without giving in to rate reductions," says Sunny Ho, executive director of the Hong Kong Shippers' Council.
Mr. Ho expects to see a cut of no more than 5% in rates. Although the council isn't a party to the trans-Pacific talks now under way, some companies that buy from its members are, and Mr. Ho tracks progress toward new 12-month rate agreements.
Read the full Wall Street Journal story .(subscription required)
For reprint and licensing requests for this article, CLICK HERE.
Stories You May Also Be Interested In
- Cargo Slump Bodes Ill for Supply Chain
- Ship Shortage Pushes Up Prices
- ANTITRUST Local Import/Export Firms Object to Shipping Cartel
- CARGO---As Cargo Volume Skyrockets, Shippers Eye Increase in Rates
- SHIPPING--With Exports Up, Shippers Raise Their Outbound Rates
- Trade Rift Could Hurt U.S. Imports
- Port Truckers Pressured by Rate Cuts