HAPAG-LLOYD REASSERTS NEED FOR RATE INCREASES

HAPAG-LLOYD REASSERTS NEED FOR RATE INCREASES

   Hapag-Lloyd said that shipping lines need to increase freight rates following the decreases witnessed in all the major east/west trades in the last few months.

   “There is a very good chance that rates will go up in the first quarter,” said Gunther Casjens, chief executive officer of Hapag-Lloyd Container Line. He rejected the argument that carriers will need to reduce capacity more before being able to convince shippers to pay higher rates.

   The Transpacific Stabilization Agreement has warned of pending increases in rates next year, while the Asia/Europe Far Eastern Freight Conference has already announced a plan to push up rates by $300 per TEU in January from Asia (except Japan) to Europe, and by $250 per container in March from Europe to Asia.

   “The vast majority of our customers think we are nuts carrying cargo at those (low) rates,” Casjens said. Shippers have “sympathy” for the ocean carriers’ plans to raise rates, he asserted.

   Casjens said that the Grand Alliance carriers will withdraw “at least 15 percent” of its global capacity throughout the year 2002. Besides Hapag-Lloyd, the other Grand Alliance carriers are Malaysia International Shipping Corp., NYK, OOCL and P&O Nedlloyd. Hapag-Lloyd said that there will be a lay-up pool of ships among the alliance carriers.