CSCL determined to stabilise freight rates, increase profits in 2006
CHINA Shipping Container Lines (CSCL) says that it is determined to stabilise freight rates and increase profits this year and expects container throughput from China to continue to grow strongly.
The carrier will impose an increase of US$400 per FEU on freight rates on east coast of America trade lanes from May 1, according to a management discussion and analysis released this month in connection with its annual financial results. Rates pertaining to the inland America trade lanes will go up by $350 per FEU and those for the west coast of America will be increased by $150 per FEU, the mainland carrier said.
Rates on the Europe and Mediterranean trade were raised by CSCL by $200 per TEU or $400 per FEU on April 1. The freight rates for Australian, Middle East and African services also went up by varying degrees.
These moves mirror those taken at the beginning of this month by carriers which are members of the Far East Freight Conference (FEFC).
CSCL has also adjusted its fuel surcharge in accordance with the upward trend of oil prices.
The bunker adjustment factor (BAF) for the Europe/Mediterranean trade lanes was increased to $270 per TEU from $240 per TEU earlier in the year. The BAF for the American trade lanes in the first quarter of this year was increased to $590 per FEU from $455 per FEU at the end of 2005.
The BAF on the US trade lanes was $320 per FEU in January 2005 but fell to $275 in April before rising to $410 in July and $455 in October last year.
On the Europe/Mediterranean trade lanes, the BAF started 2005 at $128 per TEU, slipped to $111 in February and climbed to $116 in March. It then went up steadily, reaching $205 by June. After dipping slightly to $199 in July and August it started to climb again, reaching $210 in September and $270 by November.
During 2005 CSCL's average freight rate on the Far East-America lane rose by 3.6 per cent to CNY10,082.7 (US$1,258) per TEU from CNY9,730.7 per TEU the year before. However, on other routes rates dropped by varying degrees: the fall was 8.7 per cent on domestic Chinese routes, 4.3 per cent on Far East-Australia trades, 3.5 per cent on the Far East-Europe trade lane and 1.8 per cent on the East Asia-South Asia trade lane. Average freight rates for those trade routes were CNY1,382.6 (CNY1,514.2 in 2004), CNY7,097.1 (CNY7,416.4 in 2004), CNY8,501.9 (CNY8,810.8 in 2004) and CNY3,073.5 (CNY3,131 in 2004).
The company said that it anticipates that container throughput from China will increase this year by between 13 and 23 per cent to between 85.63 million and 92.79 million TEU from 75.8 million TEU at the end of 2005.
April, 27, 2006