Major Shipping Companies Responded to the Tide of Spot Freight Rates

Time: 2021-09-15

Shortly after Dafei announced that it would suspend the rise of spot freight worldwide in the next five months, Herbert, another global shipping giant, also made a rapid response and promised not to further increase the market spot rate in the next few months!

Response from Major Shipping Companies

In an exclusive interview with Lloyd's daily, Hapag Lloyd, a shipping giant also from Europe, said: "We have been doing this for several weeks, and it is temporary. Because in this challenging market, carriers are facing increasing pressure from shippers and regulators. We also believe that the spot freight rate has peaked and we do not seek further rise. We hope the market will slowly begin to calm down."

However, different from the validity period of suspension of fare increase (September 9, 2021 to February 1, 2022) explicitly given by Da Fei, Herbert did not give a timetable for freezing the spot freight temporarily, and said that the freezing of spot freight increase would take effect "temporarily".

In response to Dafei's move, the well-known shipping media shippingwatch contacted one, OOCL, Maersk and MSc and hoped that they would comment on Dafei's practice, but so far only one and Maersk have responded.

Maersk responded to Dafei's move: "we are committed to business transformation and become an end-to-end full-service integrator of container logistics, which is why our focus is to create long-term value for customers. In order to achieve this goal, we are striving for a larger share of long-term contracts, which has increased to about 60% of our total orders."

One's position on freezing spot freight: "we have known the statement of CMA CGM. Nevertheless, one's pricing policy will remain unchanged and our price will be completely determined by market conditions."

As we all know, since the outbreak of the epidemic, especially in the recent year, affected by the tight transportation capacity and strong market demand, the current maritime freight rate has been pushed up to an unprecedented level, among which the spot freight rate accounts for a large proportion in the market.

WSC: Shipping Companies Are Not the Only Pricing Party in the Market

Recently, John Butler, the president and CEO of the world shipping Council (WSC) on behalf of the carrier, was asked, "why don't shipping companies simply decide to reduce charges?"

Mr. Butler pointed out that the world shipping Council could not determine the pricing of its members. Shipping companies are not the only price setters in the market. There are far more freight forwarders setting prices in the market than shipping companies. Therefore, it is incorrect to think that shipping companies can get together in some way and decide to charge less money.

With regard to the accusation that shipping companies make huge profits, Mr. Butler responded: "it is easy for people to act in the way determined by the market, but this is not the way of business operation."

However, in any case, we should praise Dafei, who sounded the first shot in the sea freight interdiction war. Herbert has followed up, and other shipping companies should respond one after another in the future!

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