Marred by port congestions across Asia and Europe, German carrier Hapag-Lloyd has decided to terminate calling Rotterdam on the Eastbound rotation of its Far East Loop 4, or FE4, for seven consecutive weeks, and levy additional charges on East Asia to North America route.
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The Eastbound rotation of the carrier's Far East Loop 4, or FE4, follows the Hamburg-Yantian route, involving a stop at Rotterdam -- one of the largest ports in Europe.
The carrier has terminated the calls from week 25 through 31, with the first FE4 voyage omitting the Rotterdam port scheduled for the week starting July 14 (Week 28), it said June 21.
The carrier will, however, continue to serve the port on several other loops.
In a separate customer update, the carrier also informed that it will implement a Peak Season Surcharge, or PSS, of $1000 per 20 feet container and $2000 per 40 feet container on all dry, reefer, flat rack, and open-top containers from East Asia to North America from July 18.
The announcements come in the wake of severe congestion issues at major ports in Europe and Asia.
"In Europe, Hamburg is congested, Rotterdam is congested. Some carriers are not even calling Hamburg, they omit Hamburg, they go to different ports. So, all those boxes lying in these major locations couldn't come back, and to add to that, the blank sailings are happening in Europe, you don't have a weekly schedule to go and pick these empties back."
These issues are compounded by the ongoing congestion at China's Yantian port, which has spilled over into other Asian ports.
The operations at the Yantian Port came to a halt in the last week of May after coronavirus cases resurfaced in Shenzhen. The stringent preventive measures to curb the rising cases led to severe congestion and operational delays at the port.
These issues saw many carriers either omit calls to the port or introduce new surcharges on containers coming in at the port.
On June 17, a customer update from Hapag-Lloyd had confirmed that major carriers have omitted around 53 calls at the port and shifted 17 to the neighboring Nansha port.
Further, French carrier CMA CGM on June 14 said that it will be levying a port congestion surcharge of $1,250 per reefer container on all units coming into Yantian.
The surcharge came into effect on June 11 for ships coming into Yantian from all locations except the US and its territories, Brazil, Argentina, Colombia, Ecuador, Panama, Venezuela, Uruguay, and Paraguay. The surcharge on container ships coming from the omitted locations will be applicable from July 21.
Ocean Network Express, or ONE, announced a similar surcharge of $1,000 per container for all inbound reefer containers on June 10.
The continued congestion and series of surcharges have aggravated the situation in the already disrupted container market, taking spot rates to record highs.
Platts Container Rate 5 (PCR5) -- North Asia to East Coast North America -- was assessed at $7,100 per forty-foot-equivalent unit, or FEU, on June 21 and PCR13 -- North Asia to West Coast North America -- at $5,800/FEU.
Even though the FAK rates are at an all-time high, it is almost impossible to secure space at these prices and shippers often pay premiums to get a confirmed booking, sources said.
The premium rates from North Asia to East Coast North America were heard around $15,000/FEU, sources said.