Forwarders Unhappy

Forwarding contacts have told that space is already beginning to tighten. And there is anticipation that rates will go up by around US0-200 next month. 

Damco’s Chief Commercial Officer, Richard Morgan, said he expected the peak season to be “troublesome” for some firms. 

He suggested it may have a similar impact on the market to the capacity crisis that struck the forwarding community earlier this year, when carriers withdrew capacity at the time of a surge in demand. 

“The peak in 2009 was an enormous challenge and Chinese new year in 2010 was worse,” he said. 

“Personally I’ve never seen anything like the demand for what was, ultimately, a lot less capacity and I think a lot of people got their fingers burnt. 

“The interesting thing is that some extra capacity is coming into the market, but probably not enough to scoop up what we think is going to be an early and somewhat elongated peak.” 

Jamie Cramer, Director of IFE Global Logistics, said: “Space is becoming a headache again, with a good proportion of carriers reporting they are 20% overbooked and others lacking equipment. 

He expected rates to creep up in June because of increases outlined by many, but not all, carriers. 

“On the face of it, carriers are all warning the market of impending general rate increases or peak season surcharges and also telling forwarders how full they are. But I know for fact that some forwarders or direct importers already have rates valid for the whole of June. 

He added: “From the outside the market seems strong enough for an immediate increase, but the carriers don’t seem confident enough to actually implement it across the board.” 

Morgan said rates had stabilised over the last few months at around ,800 per teu, but he expected them to increase during the peak season. 

“I think you will see freight rates float around the ,000 per teu mark.” 

Morgan said Damco had made preparations to secure space for its customers – predominately retailers – by signing volume contracts with the major carriers.