Companies

China Shipping Container to add surcharges on cargo-box shortage

(Agencies)
Updated: 2010-06-26 13:58

China Shipping Container Lines Co, the nation's second-biggest cargo-box carrier, plans to impose additional surcharges on transpacific shipments next month because of a global shortage of containers.

The shipping line will levy an "emergency equipment surcharge" of $400 per forty-foot box from July 1, Deputy General Manger Zhao Hongzhou said yesterday in Shanghai after a shareholders meeting. The company introduced a peak-season surcharge of the same amount on Asia-Americas routes from June 1, he said.

AP Moller-Maersk A/S, the world's largest container line, has forecast an "unprecedented" shortage of cargo boxes because of a surge in shipping demand amid the global economic revival. Supplies of new containers plunged worldwide last year as shipping lines pared orders amid a trade slump.

"The demand recovery has led to a shortage of boxes," Zhao said. The surcharge will help the company address the shortfall before shipments are disrupted, he said.

Maersk has increased orders for new containers and re- activated vessels parked during the recession to help move empty boxes from the U.S. to Asia. Containers are used to ship manufactured goods such as furniture, clothes and auto parts from factories in China to shops in the U.S. and Europe.

Related readings:  China's Container Freight Index on sharp rise in May  China Merchants hopes container shipments top 2008  China Shipping Container Lines posts sharp profit fall in '09  China Shipping Container Lines forecasts deficit for 2009

The demand pick-up and surcharges are helping boost earnings at shipping lines. Nippon Yusen K.K., Japan's largest shipping line by sales, this week said that its container unit may beat its annual profit target helped by peak-season levies.

China Shipping Container's "profitability is improving as demand recovers," said Zhao, who declined to elaborate further. The shipping line had a loss of 6.49 billion yuan ($955 million) last year and a first-quarter loss of 192.7 million yuan.

The company fell 1 percent in Hong Kong trading yesterday to close at HK$2.90. It has risen 3.6 percent this year compared with a 5.4 percent decline in the benchmark Hang Seng Index.

Industrywide container volumes on Asia-U.S. routes rose about 13 percent in the first quarter from a year earlier to 1.27 million 40-foot boxes, according to the Transpacific Stabilization Agreement, a shipping group.