EnContainer-line Hapag-Lloyd has issued a notice implementing an “Arbitrary Charge Origin” of $200 per TEU (20-foot equivalent container unit) for shipping from Asia to Latin America, focused on shipments from Chizhou, China. “Arbitrary” charges often relate to onward delivery from the port of unloading and are just one of the levers liners can use to boost profitability if other sources of revenue lag.
Panjiva’s analysis of Shanghai Shipping Exchange data shows that rates for shipping from China to Latin America have underperformed the average with a 13.9% drop in Q2 so far after an 8.0% slide in Q1. By contrast global average shipping rates from China fell by just 6.5% in Q2 after improving by 2.1% in Q1.
Source: Panjiva
Hapag-Lloyd’s increase in ACO may be designed to offset weaker profitability, an ongoing challenge for all the container-lines as a result of falling volumes resulting from COVID-19 as outlined in Panjiva’s research of June 5.
Panjiva’s data shows that containerized freight imports to Brazil from Asian ports fell by 4.3% year over year in April after rising 4.2% higher in Q1. Hapag-Lloyd fell inline with the average with a 4.2% dip in April after previously losing market share in Q1 with a dip of 7.2% as well as throughout 2019.
Hapag-Lloyd may have lost ground to CMA-CGM, whose shipments actually increased by 18.1% in April after rising by 16.3% in Q1. Maersk and MSC continued to dominate in terms of scale, though Maersk experienced a worse-than-average dip in volumes of 15.4% in April.
Major users of Hapag-Lloyd’s Asia-to-Brazil services who may face increased charges include auto-parts shipper Hyundai Glovis with 6,300 TEUs shipped mostly from South Korea in the 12 months to April 30, agchem firm Syngenta with 1,820 TEUs shipped and Lenovo with 1,060 TEUs, both mostly from China.
Source: Panjiva
