CMA CGM to implement major rate increases to US from East Asia on 1 October

CMA CGM, a leading container shipping company, announced it will introduce a peak season surcharge (PSS) of $4,000 per FEU, effective October 1st, for cargo traveling from Asia and India to both US coasts. This is a significant increase from its current PSS of $2,500/40 for Shanghai-Los Angeles. The shipping market intelligence firm Linerlytica notes that port congestion in Asia is affecting over 4 million TEUs, causing delays of up to 12 days in Shanghai and Ningbo.

This congestion is also straining downstream ports in south China and Southeast Asia, driving up costs. Despite this, Linerlytica suggests that port congestion and a backlog of cargo are keeping ships fully utilized, even during China's Golden Week holidays, starting October 1st. The firm also speculates that carriers might consider returning to the Red Sea and Suez Canal route from Asia to Europe, despite Yemen's Houthi rebels recently capturing a key port near the Bab el-Mandeb Strait.

However, it remains uncertain if this will deter carriers from using the route again. Experts like Lars Jensen, president of consultancy firm Vespucci Maritime, point to a trend of normalization in the Asia-Europe trade, with the trade being 28% normalized and 37% normalized from a backhaul perspective.