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Carriers eye FAK hikes as spot decline eases and capacity stays tight

Three months of declining container freight spot rates on the Asia-Europe trades were brought to an end this week when pricing reversed ahead of new FAK price hikes this month. This week's World Container Index (WCI) from Drewry saw the spot rate on its Shanghai-Rotterdam leg up 6% on the week before, at $3,522 per 40ft, while the Shanghai-Genoa route was up 7%, to $3,945 per 40ft. Meanwhile, a range of new freight all kinds prices are due to be introduced by carriers on Monday, which forwarders said had been pushed back by a few days, and possibly explains this week's rise. The 19 October FAK rates range from: $4,200 per 40ft on Asia-North Europe and $4,600 on Asia-Mediterranean, as advised by Hapag-Lloyd; to CMA CGM's $4,600 to North Europe and $4,700 to the Mediterranean; while MSC is looking for $4,500 per 40ft to both North and South Europe. While this week's WCI rise was enough to wipe out the past three weeks of Asia-Europe declines, forwarders told The Loadstar they expected rates to fall again. "We did get FAK rate increases for the second half of October, and these were then pushed back to start 19 October, but I have received this morning downward revisions for those, almost back to the levels we saw in the first half of October," one European forwarder told The Loadstar today. "We're not seeing any noticeable increase in demand - it's all still a bit flat in that respect," he added. Meanwhile, another forwarder noted that, when carriers specified an end date to the FAK prices - 31 October by both MSC and CMA CGM - it usually suggested an expectation that rates were expected to soften. "One useful indicator is when you see carriers place a time limit on the validity of their FAK pricing, as is the case now, because in my experience they don't normally increase prices before that period expires," the forwarder explained. More concerning for forwarders and their shippers was the declining reliability of services, said Jon Charles, head of product at WiseTech, echoing many anecdotal reports The Loadstar recently received. He said: "On Asia-Europe, the challenge we foresee is reliability rather than space. Only 9.9% of shipments arrived on time in September, and delays of eight days or more now account for almost half of volume, so building extra time into delivery commitments is essential." Meanwhile, MSC this week announced its Asia-North Europe Britannia service would be blanked in weeks 45 and 46, "due to ongoing market challenges". Spot rates on the transpacific trades diverged this week, with the WCI's Shanghai-Los Angeles route up 3%, to $7,884 per 40ft, while its Shanghai-New York price continued a gradual descent that began three weeks ago. This week it fell 1%, to $10,075 per 40ft, although Drewry noted that "strong US import demand continues to support transpacific rates". US west coast forwarder Freight Right said carriers had this week prioritised clearing backlogs that had built up during Golden Week, which made space for new bookings difficult to secure and propped up spot rates. "Post-holiday backlogs are taking priority - containers rolled before or during the holiday are filling available slots, leaving fewer opportunities for new bookings," it said. "Vessel removals and service adjustments over recent months are keeping space tight - limited availability does not necessarily indicate stronger overall demand," it added.

New EU parcel charges add pressure for rethink on cross-border fulfilment

Higher EU parcel charges could further strengthen the case for retailers to hold stock in Europe, as reduced China-Europe freighter capacity and elevated airfreight rates add to the cost pressures facing cross-border supply chains. An additional €2 EU handling fee per product category is expected from 1 November, on top of the €3 customs duty introduced in July on qualifying consignments worth €150 or less. For a parcel containing three product categories, the combined charges would reach €15 before transport, clearance, and VAT costs. The handling fee would also apply to orders above €150, although those shipments face normal customs tariffs rather than the temporary €3 duty. The changes could alter the calculation for brands choosing between shipping individual consumer orders from outside the EU and importing inventory for subsequent local fulfilment. Robert Jeffrey, senior advisor for international structuring at Dutch advisory firm Holdwise, told The Loadstar there was no evidence yet of brands switching. "It is a little early to see brands switch. The €3 duty started on 1 July, and the €2 fee is expected from 1 November. We expect the first changes when brands plan their stock for next year." That planning comes against a backdrop of constrained freighter capacity between China and Europe. Rotate data shows capacity on the trade down 20% year on year between 18 September and 18 October. Although capacity rebounded 27% last week, compared with the previous week, following China's Golden Week holiday, it remained 24% below the equivalent week last year. Meanwhile, WorldACD reported that global spot rates held, at $3.55 per kg, in the week ending 11 October, despite worldwide tonnage declining 1% in a third consecutive weekly fall. Global volumes were, nevertheless, 9% above the equivalent week last year, while capacity was around 1% higher, and spot rates were up 34%. WorldACD attributed elevated rates to continuing capacity disruption and substantially higher jet fuel costs and associated surcharges. Those figures illustrate the wider transport cost pressures on retailers' distribution decisions. Holdwise provided an illustrative comparison, involving a €90 consumer order containing a Chinese-made T-shirt and watch, bought by the brand for €30. Shipping the order directly from outside the EU would incur €6 in customs duty and an expected €4 handling fee. Adding assumed postage and clearance costs of €7, plus €2.50 for storage, picking and packing, produces a total of €19.50. Under its alternative model, the brand imports unsold stock into the Netherlands by sea. Holdwise calculated €2 in normal customs duty, 50 cents per order for allocated freight and clearance, €2.50 for warehouse fulfilment and €5 for delivery within the EU: a total of €10. The illustrative (and assumed) saving of €9.50 per order would amount to €190,000 across 20,000 annual orders. Bulk replenishment does not necessarily mean abandoning airfreight: the transport mode would remain a separate commercial decision. Crucially, consolidating existing consumer orders into one shipment does not remove the charges. "The comparison is for stock that the Dutch company buys and clears at import, before it sells the goods," Mr Jeffrey explained. Where goods have already been sold to consumers and are then shipped together, the individual orders remain subject to the relevant charges. The handling fee's precise start date also remains uncertain. Mr Jeffrey said the delegated regulation setting its amount was still subject to scrutiny and publication, making the change "expected from 1 November".

AI won't plug forwarder margin leaks without better data and processes

Freight forwarders must tackle unbilled charges, manual rework, and unreliable data before expecting AI to protect their margins, according to Metro Shipping and Portcast. Speaking on The Loadstar Podcast, Ian Powell, tech and solutions director at Metro, said profitability could be eroded by incorrect buy and sell rates, costs not passed on to customers, and repeated administrative work. "If we're constantly reworking activity, if we're raising credits against jobs, re-invoicing jobs, that's not optimal for us from an operating cost point of view," he said. Emma Crumpton, enterprise solutions director at freight intelligence platform Portcast, highlighted detention and demurrage as a particularly complex source of margin erosion. Different free-time allowances, charging milestones, and contractual terms make managing charges difficult at scale. Forwarders may also absorb costs to protect customer relationships. "When I think about detention and demurrage, it's a complexity issue," she said. Technology could help identify approaching free-time deadlines and ensure charges were correctly recorded and billed. But both guests stressed that automation depended on reliable data and understanding the task. Mr Powell said Metro's adoption of airfreight tracking technology included a three-month pilot to integrate systems and resolve problems. Forwarders should identify the root causes of losses, with some problems addressable through process changes. "You don't need to apply AI for the sake of it," added Ms Crumpton. That echoed Australian forwarder Neolink's experience. In an earlier interview with The Loadstar, Sean Crook said around half its shipment workflow incorporated automation. "Automation, to be honest, has probably been even bigger for us than AI," he said. Mr Crook said Neolink's staff were handling 80% to 90% more shipment volume than three years earlier, without an increase in staff numbers. He attributed the gains to both technology and a business model that gives customers a single contact responsible for the relationship from start to finish, reducing departmental handovers. Its approach also relies on obtaining purchase-order information early enough to plan shipments, rather than waiting until goods are ready. Mr Crook said receiving orders two or more weeks in advance helped the forwarder make earlier bookings and choose services suited to customers' actual inventory requirements, avoiding unnecessary premiums for speed they did not need. Meanwhile, The Loadstar's State of AI in Supply Chain 2026 report found 48.7% of respondents cited integration with existing systems as a major barrier to scaling AI; while 53.8% identified insufficient in-house AI expertise and change-management capability. Looking ahead, the podcast guests saw opportunities to turn shipment data into practical insights, while retaining human oversight of decisions affecting customers and profitability.