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Short Sea routes: box rates 'to rise'
Page 10
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CONTAINER and trailer freight rates in the busy UK short-sea unit load markets are "virtually certain to increase" over the next few months, says the International Through Transport Operators' Group (Intro), the trade association of the leading operators.
Both west and eastbound rates are likely to rise — though by varying amounts — while several increases have been announced or advised already.
The operators point to such contributory causes of the corning round as the impact of the French haulage blockades in February, followed by the two recent UK dock strikes.
In reviewing the current marketplace, Intro emphasises the continuing sharp imbalance between east and westbound trade and the implications on freight rates.
The association notes that, despite a partial recovery in UK exports, there has not yet been a matching response in terms of eastbound rates. Similar recovery in westbound traffic has already stimulated requests by operators for more realistic pricing — a typical level being a six per cent increase.
Intro is concerned that both service standards and necessary capital renewal programmes will be under increasing threat unless fully compensatory rates levels are quickly restored in the North Sea market.
"The difficulties are not now, but events this year particularly — including the recent sudden collapse of one major operator — stress the underlying seriousness of the situation."
Major service interruptions from outside causes have hit the trade this year after a period of heavy investment by leading companies. Notably, customers have benefited from lower unit costs, following investment by operators in 38-tonne equipment. "The combination of events and circumstances over the past 12 months means that operators will be looking for a fair recovery of their higher investment and operating cost levels," Intro says.
"Each operator faces differing conditions in particular markets and a varying but common urgency in the need to restore rates to a level which provides an adequate return on capital employed.