CONTAINER freight rates in Malaysia's domestic market have almost returned to pre-global crisis levels, according to Wilhelmsen Ships Service managing director Winston Loo.

"This is driven by a combination of space demand and shortage of container equipment," he was quoted as saying in a report by the Malaysia Star.

"Compared with the previous year, the base ocean rates have increased by 50 to 60 per cent on the main trades such as Far East-Europe, Middle East and the transpacific.

"As for the South America trade, there was a three-fold increase in freight rates compared with a year ago," he said.

The report said that at the height of the economic crisis in the first quarter of 2009, freight rates had declined by more than 80 per cent from the last quarter of 2008 due to falling global trade.

Mr Loo expects to see the market tapering off due to the summer season in the immediate term.

"This is being reflected by various shipping lines' actions in postponing the implementation of peak season surcharges (PSS) or the reduction in the amount of PSS from what was announced just couple of months ago.

"However, from middle to longer term, as we enter the traditional peak season, freight rates are expected to stabilise with marginal upside between five to 10 per cent in peak period," he said.

Mr Loo admits the market is very difficult to predict, with further deliveries of new buildings due in the coming months until next year.

"All the slow steaming actions in space control taken by the various lines will be negated by the introduction of these new buildings which are larger than the existing fleet.

"We foresee that freight rates should come under pressure once we get nearer towards end of the year," he said.
(Source:www.schednet.com)