Wan Hai Lines is doubling freight rates on all containers that the Taiwanese carrier ships from China’s Shenzhen port to Southeast Asia, amid an intensifying shortage of boxes.
Transpacific rates began rising in Q2 2020 and hit a 10-year high in September, but due to lower backhaul volumes, empty containers were slow to return to the ports of origin. Over time, this has caused an acute shortage of containers in Asia, and liner operators have capitalised on the situation by allocating available containers to Transpacific services. This resulted in insufficient containers for other routes, including the Asia-North Europe and Asia-South America lanes.
Wan Hai, known as an intra-Asia shipping specialist, said in a customer advisory that effective 6 November 2020, rates for containers moving between Shenzhen and Southeast Asia will go up by US$500/TEU and US$1,000/FEU. On top of this, Wan Hai will impose a peak season surcharge of US$300 from 23 November 2020.
Wan Hai explained that the container shortage is more acute in Shenzhen than other Chinese ports because most North America-bound Chinese cargoes originate from this port. As the previous freight rate, which was below US$500/TEU, was too low, a substantial hike had to justify the service, said Wan Hai. However, Wan Hai is prepared to negotiate the rates with long-term customers.
Contrastingly, as Taiwanese ports are facing a less serious container shortage, the rate hike for containers moving from these ports to Southeast Asia will be between US$100 and US$200/TEU.