High Shipping Costs Are Here to Stay, Says Bloomberg
By Henry Ren (Bloomberg) Stubbornly high shipping expenses for businesses are getting sealed into contracts for the next 12 months, forcing companies to pass the extra costs on to consumers....
HONG KONG -(Dow Jones)- Orient Overseas (International) Ltd. (0316.HK) plans to raise rates again for container shipments for the north-Europe-to-Asia route beginning June 15, the Hong Kong shipper said Wednesday, as part of plans to boost profitability after its net profit plunged last year.
The shipper’s container-freight unit Orient Overseas Container Line, or OOCL, said it plans to increase freight rates by US$200 per 20-foot-equivalent unit (TEU) or 40-foot-equivalent unit (FEU) for all shipments through the trade route.
The latest rate increase comes after OOCL raised its freight rate for the same route by US$200 per TEU or per FEU, starting Tuesday.
The container shipper didn’t disclose its existing freight rate on its north-Europe-to-Asia route, but it noted the current freight rate is below the required level to cover its operating and transportation costs.
The company–controlled by the family of former Hong Kong Chief Executive Tung Chee-hwa–in March posted a 90% decline in 2011 net profit, as high fuel costs and capacity oversupply continued to weigh on its bottom line.
-By Joanne Chiu, Dow Jones Newswires
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