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

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 and rising rates on these routes converge.

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 used by shipping companies to adjust rates based on market fluctuations and supply-demand conditions. Industry experts view this move as a response to the rising trend in freight rates on North American routes and the anticipated increase in seasonal demand.

Recent data shows 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%.

In light of uncertainties in the shipping market, there are also moves to increase fuel surcharges. Jangkum Shipping recently announced plans to adjust its low-sulfur fuel surcharge (LSF) for imports arriving in South Korea.

The LSF is a surcharge that reflects fluctuations in the price of low-sulfur fuel mandated by the International Maritime Organization's (IMO) 'IMO 2020' environmental regulations. Jangkum Shipping stated, "The adjustment was unavoidable due to rising international oil prices, which have increased the fuel costs necessary for vessel operations."

Pan Ocean is extending its Emergency Bunker Surcharge (EBS) for exports and imports between South Korea and Japan.

The company cited fuel supply instability and ongoing price increases due to the prolonged conflict in Iran as reasons for the extension. The EBS will apply to container cargo between South Korea and Japan, with a surcharge of $50 for 20-foot containers and $100 for 40-foot containers starting from sailings on July 1.

An industry insider remarked, "While the ceasefire agreement between the U.S. and Iran has alleviated immediate concerns, the shipping market remains vigilant regarding risks stemming from the Middle East. In a situation where oil prices and freight rate volatility are increasing, shipping companies have no choice but to adjust rates and various surcharges to manage costs and profitability."

* This article has been translated by AI.