HMM to Increase Freight Rates on North American Routes Starting in July

Photo courtesy of HMM

HMM, South Korea's largest container shipping company, will raise freight rates on North American routes starting in July. This decision comes amid ongoing uncertainties in the shipping market following the U.S.-Iran ceasefire, as strong demand during the peak season coincides with rising freight rates.
According to the shipping industry on June 17, HMM will implement a General Rate Increase (GRI) for all cargo departing globally to the United States, Canada, and Mexico, effective July 15.
The increase will be $2,700 for a 20-foot container (TEU) and $3,000 for a 40-foot container. For a 40-foot high cube (HC) container, the rate will be $3,375, while a 45-foot container will see a charge of $3,798.
The GRI is a pricing mechanism that shipping companies use to adjust rates based on market fluctuations and supply-demand conditions. Industry analysts view this move as a response to the rising trend in freight rates on North American routes and increased demand during the peak season.
Recent data indicates that freight rates for North American routes have been on the rise. According to the Korea Customs Service, maritime export rates to the U.S. West Coast increased by 10.1% in May compared to the previous month, while rates to the East Coast rose by 9.9%.
Additionally, there are ongoing adjustments to fuel surcharges due to uncertainties in the shipping market. Jangkum Shipping recently announced plans to adjust its low-sulfur fuel surcharge (LSF) for imports arriving in South Korea.
The LSF is a surcharge imposed to reflect fluctuations in the price of low-sulfur fuel mandated by the International Maritime Organization's 'IMO 2020' environmental regulations. Jangkum Shipping stated, "The rise in international oil prices has increased the fuel costs necessary for vessel operations, making rate adjustments unavoidable."
Pan Ocean has also extended its Emergency Bunker Surcharge (EBS) for export and import cargo between South Korea and Japan. The company cited ongoing fuel supply instability and rising prices due to the prolonged conflict in Iran as reasons for the extension. Starting from July 1, a surcharge of $50 will be applied to 20-foot containers and $100 to 40-foot containers for this route.
An industry insider noted, "While the ceasefire agreement between the U.S. and Iran has alleviated immediate concerns, the shipping market remains vigilant regarding risks from the Middle East. In a situation of increased volatility in oil prices and freight rates, shipping companies have no choice but to adjust rates and various surcharges to manage costs and profitability."

* This article has been translated by AI.

Lee nakyeong nakk@ajunews.com