Drewry Supply Chain Advisors said carriers are targeting contract renewals with general rate increases coming into effect this month.
"The timing of these increases is important, as prevailing spot market rates have a very strong influence on contract rates, for which negotiations are presently getting underway for 2014 calendar year," said the company in the latest issue of its Drewry Logistics Executive Briefing newsletter
"Strong spot rates will be used by carriers as leverage to seek contract rate increases, particularly on the headhaul Asia-Europe trade (most transpacific contracts run May to April). But on North-South trades such as Asia-South America, cargo owners should expect to gain lower contract rates despite an expected recovery in the spot market.
"Carriers have announced ambitious rates increases across both East-West and North-South trades in parallel with capacity corrections, in a desperate bid to shore up pricing. Drewry believes that some of these increases will be accepted by the market, but that their sustainability will depend on the duration of the capacity withdrawals," noting, for example that on the Asia-Europe trade carriers have only announced skipped sailings for November, so most of the capacity will return from December.
"By contrast, whole service strings have been removed from the transpacific until the resumption of peak season next year. Hence, any rally in eastbound transpacific rates may prove to be more sustained, particularly if an earlier Chinese New Year boosts cargo volumes in December and January."