Rates for 40 foot containers rose 3 percent globally this week, reported the Drewry World Container Index. The increase was notable given that prior to last week, the container market had experienced a steady 17-week decline.
Rates on routes between Asia and the West Coast rebounded significantly, according to experts at Freightos, who said that prices increased by 18 percent to USD 1,687 (EUR 1,452.14) from the previous week. Prices from the Asia to the East Coast were up 2 percent, to USD 3071 (EUR 2,643.46).
Drewry attributed some of the increases to a General Rate Increase among carriers that took place in mid-October, while Xeneta Chief Analyst said that USTR port fees, and China’s retaliatory fees, had also given carriers reasons to justify rate increases.
Additionally, the U.S. Trade Representative made changes to the Section 301 fees it started charging on 14 October, which meant hybrid vessels which carry both automobiles, machinery, and containers would face additional charges.
Atlantic Container Line CEO Andrew Abbott told CNBC his company paid a USD 1.4 million (EUR 1.2 million) tariff on 14 October thanks to the additional fees.
Abbott said that 25 hybrid vessels from his company travel on the affected route a year.
“We’re looking at a tariff total of USD 34 million [EUR 29 million] a year," he said.
He said that his customers found it hard to believe that the tariff costs would be passed on to them.
"They never thought in 1,000 years that we would be affected. And we're trying to tell people now, and the magnitude of what is at stake is putting people in shock. At this point, the importers are dealing with tariffs, and this is now something on top of that, and possibly could shut them down," Abbott said.
