Hanjin shipping to raise transatlantic rates

Thursday, 21 January 2010

SOUTH KOREA’s largest liner shipping company has announced a year-long pricing plan for its transatlantic east and westbound trades linking North America with Europe, including the Mediterranean, that it hopes will lift freight rates by at least  US$900/20ft container this year.

The phased schedule will result in Hanjin hiking its rates in both directions by $300/20ft and $400/40ft on April 1, July 1 and October 1.

A Hanjin spokesperson explained: “This rate recovery programme is necessary for us as we must maintain the quality service and schedule reliability that our customers expect from us. We will continue to seek all possible measures that will bring mutual benefits for us and our customers during this time of crisis.”

The company backed up its argument by saying that cargo volumes had dropped massively in 2009 and this had “pushed freight rates to unreasonably low levels”.

It was a situation confirmed by the most recent traffic figures released by the European Liner Affairs Association (ELAA) which revealed that box volumes in the first 11 months of 2009 slid by 17% (to 2.6 m teu) westbound and 28% (to 2.3 m teu) eastbound.

While Hanjin acknowledged that the rate of decline was slowing, even pointing to some signs of recovery in the trade, it said that its operating costs, including fuel, were increasing.

The group further stressed that the massive losses suffered by carriers in the transatlantic trade in 2009 were unsustainable.

It has been the main reason for the significant culls in capacity that have taken place in the market over the past 12 months and which, arguably, now put the lines in a better position to raise their rates.

Hanjin runs its transatlantic services in a joint operation with Coscon, K Line and Yang Ming.