News Content
Asia-Latin America rates cost the same as taking a NY taxi: K+N CEO
KUEHNE + Nagel CEO Detlef Trefzger has compared the current ultra-low sea freight rates on Asia-Latin America routes to the price of taking a taxi in New York during a conference call with analysts to discuss the forwarder's quarterly results.
'I would like to give you one example (of low rates): Asia export for Latin America east coast, from somewhere in Asia to Santos or Buenos Aires. You pay at the moment, for a 40-foot container port to port, rates of US$25," Dr Trefzger told Lloyd's Loading List.
'For US$25, you can enter a taxi in New York, but you will not go far. And that shows the unsustainable rate level of sea freight at the moment."
Commenting on the effectiveness of consolidation to reduce overcapacity in the container shipping market by lines exiting the market or forming alliances, Mr Trefzger said: 'The capacity is still there and consolidation has to happen on the number of vessels in the market."
He warned that unless the shipping industry did not start to scrap ships 'more actively and to a broader extent", the market would continue to a see 'a pattern of 'rates up, rates down, rates up, rates down' that we have seen in the last 24 months or so."
Asked by Lloyd's Loading List whether shipping lines should go beyond vessel scrapping to address overcapacity, Mr Trefzger replied: 'Postpone new ships coming to the market? Look, I can't judge the sea freight industry, but overcapacity is a given despite the scrapping of vessels being at an all-time high. The market will not find its equilibrium if the capacity stays as it is or increases.
He added: 'I would assume that, like in other markets, eventually there will be a certain capacity adaptation or a reduction. If not, then we will see the rates declining or staying at these unsustainable levels."
'I would like to give you one example (of low rates): Asia export for Latin America east coast, from somewhere in Asia to Santos or Buenos Aires. You pay at the moment, for a 40-foot container port to port, rates of US$25," Dr Trefzger told Lloyd's Loading List.
'For US$25, you can enter a taxi in New York, but you will not go far. And that shows the unsustainable rate level of sea freight at the moment."
Commenting on the effectiveness of consolidation to reduce overcapacity in the container shipping market by lines exiting the market or forming alliances, Mr Trefzger said: 'The capacity is still there and consolidation has to happen on the number of vessels in the market."
He warned that unless the shipping industry did not start to scrap ships 'more actively and to a broader extent", the market would continue to a see 'a pattern of 'rates up, rates down, rates up, rates down' that we have seen in the last 24 months or so."
Asked by Lloyd's Loading List whether shipping lines should go beyond vessel scrapping to address overcapacity, Mr Trefzger replied: 'Postpone new ships coming to the market? Look, I can't judge the sea freight industry, but overcapacity is a given despite the scrapping of vessels being at an all-time high. The market will not find its equilibrium if the capacity stays as it is or increases.
He added: 'I would assume that, like in other markets, eventually there will be a certain capacity adaptation or a reduction. If not, then we will see the rates declining or staying at these unsustainable levels."
Latest News
- For the first time, tianjin Port realized the whole process of dock operati...
- From January to August, piracy incidents in Asia increased by 38%!The situa...
- Quasi-conference TSA closes as role redundant in mega merger world
- Singapore says TPP, born again as CPTPP, is now headed for adoption
- Antwerp posts 5th record year with boxes up 4.3pc to 10 million TEU
- Savannah lifts record 4 million TEU in '17 as it deepens port
