This week the consultancy Linerlytica reported that carriers had accused Maersk of driving down spot rates, in what is an ironic turnaround given that in the past it is often Maersk that has levelled that accusation at others, but it has now emerged that it could be the Maersk Spot algorithm that is to blame for what appears to be irregular rates.
Rates in general have fallen to their lowest levels since May 2020 according to the Shanghai Container Freight Index (SCFI), but at least one forwarder in Greece has told Container News that Maersk has effectively ceded control of its rates to an algorithm on its Maersk Spot dynamic pricing system that is setting very low prices at times.
“I talk with Maersk locally and they tell me we don’t control it, it’s the central system, a kind of automatic calculation, they don’t know the parameters that the system gets to come up with such a freight, but that’s the reality,” said the forwarder, who preferred to speak off the record.
He added that Europe to Asia prices on MSC and CMA CGM, and other lines, are considerably higher than the rates offered by Maersk.
Rates on the backhaul leg of the Asia/Europe trades have already been squeezed with the introduction of new capacity, 30 ships in September alone according to Linerlytica, with many of these vessels deployed on the European trade, and Maersk Spot’s dynamic pricing system does reflect that, but as Linerlytica pointed out other carriers are unhappy at the low prices quoted.
That mood of disgruntlement is because carriers want to reposition empty boxes to Asia and to redeem the cost of that repositioning, including the fuel and handling charges, but out of Greece that cost is not being met.
“Carriers are paying to move cargo eastwards, due to the low rates, westbound is more reasonable I would say, in line with the market. Eastbound we see rates that are 20% of the market rate sometimes,” explained the forwarder.
Container News tested the algorithm with the help of a friendly UK-based forwarder, who also preferred to remain anonymous, and found that Maersk’s backhaul rate out of Southampton to Shanghai, for a 15tonne 40ft box was US$584, or US$400 out of Felixstowe.
That compared to a rate from Hapag-Lloyd which was minus US$389 plus a US$564 fuel surcharge, totalling US$175 for the same cargo, apparently showing that Maersk’s algorithm is in fact raising rates, out of the UK.
However, the UK forwarder pointed out, “Maersk’s algorithm works like Ryan Air using dynamic ticketing, if it detects that there are many people enquiring about a particular trade it will raise the rates.”
In what was a non-scientific test of this theory, the forwarder switched his enquiry to Felixstowe for Maersk and found that the rate was US$184 cheaper than its Southampton rate, whereas Hapag’s London Gateway price was the same as its Southampton price.
However, the UK forwarder pointed out that you cannot speak to Maersk, unlike other carriers, including Hapag-Lloyd, there is not a customer service team at the end of a phone line that you can call to discuss your booking.
He added that COSCO has a sales team, OOCL has a salesperson and an assistant, while MSC prefers to communicate by email. He said, “MSC want you to put it in an email so they can ignore it”.
Container News contacted Maersk, but the Danish carrier did not make any comment.
Mary Ann Evans
Correspondent at Large
