Doubts over more GRIs as Taiwan carriers bank on demand returning

Source: The Loadstar
Date: 20th April 2023

Taiwan’s Maritime Port Bureau said this week there was no longer any need for it to coordinate shipping capacity with the island’s three main liner operators.

In late 2020, as shipping capacity tightened due to Covid-related port bottlenecks, the bureau formed a working group to coordinate shipping slots with Evergreen, Yang Ming and Wan Hai to assist Taiwanese shippers.

As the freight market regressed to pre-pandemic levels, this working group reduced its meeting frequency from monthly to quarterly, and this month said it would only meet every six months. This move, coinciding with shipping lines’ attempting to hike freight rates, has spoken volumes.

Along with other major carriers, Evergreen, Yang Ming and Wan Hai, optimistic about a demand pick-up in H2, have announced another general rate increase, for 1 May.

Transpacific freight rates will rise by $900/teu and $1,000/feu, although customer acceptance will determine if the higher rates materialise.

The lines implemented a GRI of $600 per feu on the trade for mid-Pril. They had planned to increase rates by as much as $1,000 but settled for an increase of $600. That said, Evergreen said that it was optimistic that a slowdown in inflation and US retailer restocking would drive demand.

The shipping lines have also been encouraged by the 8% jump in the Shanghai Containerised Freight Index last Friday.

The average index level for the Asia-US west coast hit a five-month high of $1,668/feu, rising $376 from 7 April. The Asia-US east coast rate went up by $418, to $2,565/feu.

However, the higher rates were more a result of liner operators’ better capacity management and blanked sailings, than a rebound in volumes.

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