Strong South American import demand prompts further rise in shipping rates

Container freight rates from Asia to South America are likely to keep rising in June as strong cargo demand continues to tighten supply of empty containers and space for ships, market players said
.

Germany's Hapag-Lloyd announced on May 27 that a peak season surcharge of $1,450 per 40 foot equivalent unit (FEU) will be imposed on cargo from East Asia to the west coast of South America from June 14
.
This is on top of the $8,850/FEU currently valid until May 31 (including PSS of $700/FEU)
.

Prioritize capacity

Unprecedented U.
S.
imports, mainly from Asia, have forced shipowners to prioritize capacity on the trans-Pacific eastbound trade lane from China to the U.
S.
west coast during the coronavirus lockdown, leaving fewer ships available for further south Chile, Colombia and Peru.

.

But imports from Asia are also strong in South America, especially in Brazil
.
Hapag-Lloyd also announced that from June 15, total freight rates on the East Asia to East Coast South America trade lane will increase by $600/FEU, in addition to rates that have climbed to $6,400/FEU, Includes PSS of $1450/FEU valid until the end of May
.

Carlos Fuchs, director of freight forwarder Royal Cargo do Brasil, said that shipping lines operating on the China-Brazil trade route have been limiting shippers' contract volumes this year, and their allocations have basically been halved, while others need to be Spot market bookings
.

"The normal peak season is from September or October to January, but this year our biggest volume is in May, which is usually a month with fewer transactions," Fuchs said
.

Brazil economic support

Fabrizio De Paulis, managing director of Brazil's De Paulis Logistics, said a Brazilian government's plan to combat economic damage during the coronavirus pandemic has provided monthly subsidies to low-income people, boosting demand for Chinese-made consumer goods
.

With import demand expected to remain strong in the coming months, Asian factories already have considerable backlogs, and June GRIs and surcharges to South America suggest that the upward trend in freight rates will continue, De Paulis said
.

“The situation is worse now for shipments from China to Brazil, there are no vacancies on the ships, and the shipments are wobbly,” De Paulis said.
increase
.
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