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COPENHAGEN (Dow Jones)–Danish oil and shipping company A.P. Moller-Maersk A/S (MAERSK-B.KO) confirmed Friday that its container shipping arm Maersk Line will hike rates on its westbound Asia-Europe routes by $400 a standard 20-foot container as of April 1.
The general rate increase, received by customers early Friday, will apply to all dry and reefer cargo moving from all Asian ports to all destinations in Europe, the company said.
The rate move comes only days after Maersk Line announced it will cut its vessel capacity on the Asia-Europe trade lane by 9% due to oversupply, which has dragged down freight rates to “unsustainably low levels.”
“The Asia-Europe trade remains the world’s busiest trade route, however the supply of vessels currently operating on this trade simply outweighs the demand. We are therefore rationalizing our service by taking out vessel capacity and thereby reducing costs,” said Vincent Clerc, chief product and yield officer for Maersk Line at the announcement of the capacity reduction on Feb. 17.
According to a report published by the Journal of Commerce Thursday, spot rates on the Asia-Europe routes rose 3%, after Maersk Line announced the capacity reduction.
Maersk Line reports fourth-quarter 2011 results along with its parent company on Feb. 27. The weak rate level is expected by analysts to have driven Maersk Line’s fourth-quarter bottom line to a net loss of about 2.8 billion Danish kroner ($505.2 million), said Sydbank analyst Jacob Pedersen.
-Flemming Emil Hansen, Copenhagen Bureau, Dow Jones Newswires
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