Seajet
Shipping
News

Early

September

2009

Very Important Update
about
FREIGHT RATE INCREASES

Dear Customers and Friends of Seajet!

I am referring to my email from August in which I advised the proposed GRIs from Asia as well as Europe.

Europe:

Whereas the GRI from Asia was implemented and carriers are appearing to hold firm for the moment, carriers from Europe have now postponed the announced GRI from September 1 to October 1, 2009. In the process they have gone to name it “Rate Restoration Plan” instead of calling it a GRI (General Rate Increase). Again, it remains to be seen if by October the carriers will hold firm and really implement the “Rate Restoration Plan”. If yes, there is still a bit more good news which is that the levels are now $50.00/container less than when the GRI was announced last month. They are $350.00/20’ and $450.00/40’/40’HC. Having said this, a number of carriers (never lost for creating ever new descriptions of charges to increase revenue) have filed Interim Fuel Participation Charges (IFP) and Fuel Recovery Charges. These additional charges will more than make up for the decrease of the announced GRIs. However, considering the delay from September 1 to October 1 I am wondering if any increases will occur. The trans-Atlantic market looks relatively good when compared to the trade lanes from Asia to Europe and the US. It is also the much smaller market of the three so carriers may place more importance to restore Asia to US and Europe.

Asia:

After the GRI of August 10, 2009 all carriers have filed for a Peak Season Surcharge of $320/20’ – $400/40’ – $450/40’HC – $506/45’ effective in gate at origin of 09/15/09 until 10/31/09. This PSS is actually less than what has initially been floated as late as yesterday which was $400/20’ – $500/40’ – $563/40’HC – $633/45’. The GRI has been enacted with practically no exceptions so it will need to be seen if the carriers will be able to push through the PSS in full or in part this year as well. Having said this, just yesterday I read an article in the JoC in which they said that for the first half of 2009 liner shipping losses exceeded $ 6 billion. Their (carriers) cash reserves are severely depleted and that “has lead almost all major carriers to seek additional capital using whatever means available including share placements, rights issues, debt-to-equity conversions and asset sales”. Considering this it would make sense if carriers would muster the discipline of restoring their rate structures and implement the PSS. They simply may not have the financial means not to do so at least in part.

Time will tell and we shall keep you informed as always.

Best regards,

Andreas Bauermeister,
President 

Seajet Express Inc., 46 Arlington Street, Chelsea, MA 02150 - Telephone 617.884.0991 - www.seajet.com