NOL's July 1 rate hike predicted to be just temporary

Rates will be boosted by US$400/FEU.

OCBC said that according to the Shanghai Containerised Freight Index (SCFI), average freight rates for 2Q13 have fallen by more than 13% QoQ with the decline more pronounced in certain sectors (mainly Europe and South America: -35.4% QoQ % -34.5% QoQ each).

The sole sector that registered marginal improvements was Intra-Asia (+4.1% QoQ). This was in stark contrast to the figures over the same period last year where overall average freight rates improved by 31.2% QoQ as carriers collectively enforced capacity cuts and rate hikes.

Here's more from OCBC:

Jul 1 boost may be temporary. Members of the Transpacific Stabilisation Agreement (TSA) – of which Neptune Orient Lines (NOL) belongs to – have agreed to hike rates by US$400/FEU for the transpacific route and by US$600/FEU for all other destinations, effective 1 Jul.

This increase will hopefully help to boost rates ahead of the peak-shipping season. However, carriers continue to be plagued by over-capacity issues and the impact from this increase could only be temporary in nature.

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