Tide of Sea Freight Prices Rises Again

April 13

00:00 2010

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Shipping container started going up in January, new charges are being added today and annual contracts for container costs expected to go up May 1.

J.P. Park, director of purchasing for XL Screw, said the result is the price of imported fasteners to North America is likely to climb 3% to 5% due to ocean freight charges.

• Transpacific freight jumped $320 per $20 ft. container January 15, 2010, due to an “Emergency Revenue Charge.”

In addition there have been increases such as higher Bunker Charge, In-Land Fuel Surcharge and extension by some carriers of the peak season surcharge through the traditionally non-peak season of September to April.

• Effective April 1 there will be a general rate increase of $240 for 20′ containers / $300 for 40′ on dry and WC local reefer cargo; and more on other categories. Also the documentation fee doubles to $50.

• The Transpacific Shippers Association is seeking A $640/20′ ($800/40′) increase May 1 when new freight contracts become effective.

Barry Porteous of Porteous Fastener Co. said the increases result from major carriers losing money. The ships are traveling at slow speed to save fuel and making more stops. Some steamship lines are taking ships offline. They are delaying cargo on the docks even for major Big Box customers, Porteous noted.

One problem for the fastener industry is that a container of fasteners is not as profitable as one filled with consumer products such as televisions, Porteous pointed out.

Beyond price, Park noted that “as a result of capacity reduction by carriers through reduction of their fleets and sailing schedule, getting container space has been more difficult and many shipments are delayed from overseas.”

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