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Container freight rates bottom out

FREIGHT rates for containerised cargo appear to be bottoming out after plunging by more than a quarter from last year’s highs, latest Neptune Orient Lines figures show. Average revenue per 40 ft container crept up to $2,326 in the four-week period to May 29 from $2,322 in the previous month, but is still 23% lower than a year ago. Volumes also remain very weak, with NOL carrying 21% fewer containers in May than 12 months earlier.
The line shifted 159,100 feu in the latest four week period, compared with 210,700 teu in May 2008. So far this year, NOL has experienced a 25% drop in cargo volumes compared with the corresponding period of 2008, while average freight rates have dropped by 18% to $2,415 per feu. Late last year, they stood at more than $3,100 before international trade collapsed when the global banking crisis hit trade finance. In its latest operational update, NOL said the decrease in volume in May reflected a decline in demand on all major trade lanes. Average revenue per container was pushed down by both cheaper core freight rates and lower bunker recovery. Some lines have been offering all-in freight prices that combine ocean rates, fuel and other surcharges. With oil prices rising, revenue has been squeezed even further. NOL has led the way in anchoring surplus tonnage, while some others appear to have been cutting rates in an attempt to boost volumes. In such dire conditions, AP Moller-Maersk chief executive Nils Andersen told the Danish newspaper Berlingske Tidende that group investments would be directed towards those divisions producing the best returns, such as energy and ports, rather than container shipping that is deep in the red. Any additional boxship requirements would be secured in the charter market rather than through further ordering, he said. This is in line with strategy outlined by Mr Andersen in recent media briefings and an interview with Lloyd’s List in which he nevertheless stressed that, despite huge container shipping losses, AP Moller-Maersk remained fully committed to the industry and was not turning its back on the sector. Maersk Line chief executive Eivind Kolding also said the world’s largest container line was determined to maintain market share and fight attempts from competitors to lure away key accounts.

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