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Carriers offer incentives as Back Haul rates go negative to China

Carriers offer incentives as Back Haul rates go negative to China

Posted on September 15, 2023   |  

Shipping carriers are offering financial incentives to encourage customers to move cargo from Europe, the Middle East, and backhaul routes.

Container transport rates to Asia are as low as $5 per container from India and the Middle East, and $80 per container from Hamburg to Shanghai.

Carriers are reimbursed between $170 and $245 for relocating their equipment to Asia to offset the low rates.

The movement of empty containers is a significant financial burden, with around 60 million such moves costing approximately $20 billion annually.

Despite a 5% increase in capacity this year, the industry faces rate pressure due to minimal demand growth of just 0.3%.

Drewry's projections indicate a demand recovery in 2024 and 2025, whereas 2022 anticipates a mere 0.5% growth in demand, coupled with a 4.5% capacity increase.