China Shipping to raise cargo rates up to $300/TEU
Updated: 2009-06-27 08:04
(HK Edition)
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HONG KONG: China Shipping Container Lines Co (CSCL), the country's second-biggest box carrier, plans to almost double rates in Asia-Europe routes to as much as $650 per 20-foot container next month even as demand weakens.
"Companies will raise rates, not because the market has recovered, but because the shipping lines have the resolution to do this," China Shipping managing director Huang Xiaowen said.
"We have found that if we cut rates, load factors don't increase," he said in an interview in Shanghai yesterday.
The busiest season for sea-cargo box carriers traditionally starts on July 1, when rates are raised to cash in on European and US retailers stocking up for the back-to-school and holiday-shopping periods. Container rates have fallen in the past year, partly because retailers are paring orders on weak consumer spending.
"This peak season is going to be very short," CSCL chairman Li Shaode said in an interview in Shanghai yesterday. All 20 of the analysts tracked by Bloomberg covering the shipping line expect it to make a full-year loss. The median estimate is a 2.4 billion yuan ($351 million) deficit.
China Shipping will raise its rates by as much as $300 per 20-foot container from July 1, Huang said.
The container line's stock jumped as much as 9 percent to HK$2.11 in Hong Kong on Friday, the biggest intraday climb since June 3. It closed at HK$2.10, boosting its gain this year to 79 percent, compared with a 29 percent increase for the benchmark Hang Seng Index.
Bloomberg News
(HK Edition 06/27/2009 page2)